Mumbai: Plans by Big Tech to examine further into the Indian financial sector pose a risk for traditional banks because technology companies have the potential to become dominant players in financial services, said the Indian reserve bank (RBI).
The plan will also create challenges related to governance for regulators, the central bank writes in a report on two-year financial stability on Thursday.
The main technology company “straddles various different business lines with sometimes the opaking governance structure,” he said.
RBI said concerns include operational risk, too large problems – to fail, challenges for antitrust rules, Siber security and data privacy.
But it adds that positive results can include efficiency benefits and more access to financial services.
Amazon.com Inc.
and Google currently provide basic payment services in India.
Both companies also Facebook and others have submitted a license to operate a broader retail payment system and a broader settlement in partnership with Indian companies such as reliance and lenders.
The central bank’s warning comes at times a lot of tensions between the Government of India and US technology giants on issues that range from e-commerce rules for privacy and data content posted on their platforms.
Amazon, Facebook, Facebook owned WhatsApp and Twitter are all trapped in a dispute with New Delhi.
The largest state-run bank in India and the Union Global Union, which represents around 20 million workers globally last month also raises concerns about the entry of large technology companies to the state payment sector.
Big Tech’s encouragement to the Indian financial sector raises worries, RBI said
