dilip asbe: Whatever is not written in regulation, means a ‘No’: NPCI chief Dilip Asbe

Asbe said there are no grey areas in Indian fintech.

“Whatever is not written in regulation means a no…When we are part of managing other people’s money, we should be responsible. Compliance is good and risks become higher with size,” said Asbe who was speaking at FTX 2024, a fintech conference organised by Razorpay, in Bengaluru. “If fintech founders are here to build long-term, I don’t see it without compliance.”

In a regulatory clampdown, the Reserve Bank of India (RBI) recently asked Paytm Payments Bank to stop offering basic banking services from February-end, and later granted a 15-day extension to the deadline.

On Friday, the central bank also allowed Paytm to move its Unified Payments Interface (UPI)-based payments business from associate entity Paytm Payments Bank to four to five other banks.

It also asked NPCI to examine the request of Paytm parent One 97 Communications Ltd (OCL) to become a third-party application provider (TPAP) for UPI channel.

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Growth in digital payments ecosystem
On growth in the digital payments ecosystem, Asbe said, “The tipping point in digital payments is still to arrive and we are sitting on a 10x growth.”

He listed conversion of cash to Central Bank Digital Currency (CBDC), and recurring and international payments as the next big opportunities for growth.

“Recurring payments is a great opportunity. For a country that does 500 million transactions a day, we are only doing a million mandates a month,” Asbe said.

NPCI has also been pushing the lever on international expansion of UPI payments. The domestic service is currently live in countries including the United Arab Emirates (UAE) and Mauritius.

“On a cross-border side, we are looking at UPI and RuPay both. The important part is building cross-border pipes, and if we want to be in the top three economies, we need efficient cross border payments,” he said. “We want to create the presence of the platforms. It’s a long journey and plumbing has started and is still 5-7 years away.”

Asbe said that apart from its flagship UPI product, the network operator is also seeing a growth with FASTag payments in the country.

“While UPI is like a flagship platform for NPCI, we are seeing good growth in FASTag. About 97% of the collection happens electronically and the collection has also gone up 3- 4 times,” Asbe said. “Now there are more new use cases like parking and more, and the potential is too high.”

On how artificial intelligence can be leveraged in digital payments, Asbe said, “AI is going to be a formidable force in data generation activity. And payments is the second biggest data generator after social media. So for AI the payment use-case makes sense. And many fintechs are using AI for incentivisation, hyper-personalisation and frauds. We at NPCI are also looking at AI.”

Asbe said there are no grey areas in Indian fintech.

“Whatever is not written in regulation means a no…When we are part of managing other people’s money, we should be responsible. Compliance is good and risks become higher with size,” said Asbe who was speaking at FTX 2024, a fintech conference organised by Razorpay, in Bengaluru. “If fintech founders are here to build long-term, I don’t see it without compliance.”

In a regulatory clampdown, the Reserve Bank of India (RBI) recently asked Paytm Payments Bank to stop offering basic banking services from February-end, and later granted a 15-day extension to the deadline.

On Friday, the central bank also allowed Paytm to move its Unified Payments Interface (UPI)-based payments business from associate entity Paytm Payments Bank to four to five other banks.

It also asked NPCI to examine the request of Paytm parent One 97 Communications Ltd (OCL) to become a third-party application provider (TPAP) for UPI channel.

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Growth in digital payments ecosystem
On growth in the digital payments ecosystem, Asbe said, “The tipping point in digital payments is still to arrive and we are sitting on a 10x growth.”

He listed conversion of cash to Central Bank Digital Currency (CBDC), and recurring and international payments as the next big opportunities for growth.

“Recurring payments is a great opportunity. For a country that does 500 million transactions a day, we are only doing a million mandates a month,” Asbe said.

NPCI has also been pushing the lever on international expansion of UPI payments. The domestic service is currently live in countries including the United Arab Emirates (UAE) and Mauritius.

“On a cross-border side, we are looking at UPI and RuPay both. The important part is building cross-border pipes, and if we want to be in the top three economies, we need efficient cross border payments,” he said. “We want to create the presence of the platforms. It’s a long journey and plumbing has started and is still 5-7 years away.”

Asbe said that apart from its flagship UPI product, the network operator is also seeing a growth with FASTag payments in the country.

“While UPI is like a flagship platform for NPCI, we are seeing good growth in FASTag. About 97% of the collection happens electronically and the collection has also gone up 3- 4 times,” Asbe said. “Now there are more new use cases like parking and more, and the potential is too high.”

On how artificial intelligence can be leveraged in digital payments, Asbe said, “AI is going to be a formidable force in data generation activity. And payments is the second biggest data generator after social media. So for AI the payment use-case makes sense. And many fintechs are using AI for incentivisation, hyper-personalisation and frauds. We at NPCI are also looking at AI.”