INSUBCONTINENT EXCLUSIVE:
NITI Aayog seeks comments on the discussion paper till December 31, 2021.Government think-tank Niti Aayog proposed setting up of full-stack
'digital banks', which would rely on the internet and other proximate channels to offer their services and not physical branches, to bridge
the current credit gap faced by MSMEs.In a discussion paper titled 'Digital Banks: A Proposal for Licensing - Regulatory Regime for India',
the think-tank provides a template and roadmap for a digital bank licensing and regulatory regime
NITI Aayog seeks comments on the discussion paper till December 31, 2021.NITI Aayog CEO Amitabh Kant in the foreword said this discussion
paper examines the global scenario, and based on the same, recommends a new segment of regulated entities - full-stack digital banks
"Based on the comments received, the paper will be finalized and shared as a policy recommendation from NITI Aayog," he said.The paper
recommends a two-stage approach, with a digital business bank license to begin with and Digital (Universal) Bank license after the
policymakers and regulators have gained experience from the former.Even with the Digital Business Bank license, NITI Aayog recommends a
calibrated approach comprising the following steps:The issue of a restricted Digital Business Bank license
The license will be restricted in terms of volume/ value of customers servicedThe enlistment (of the licensee) in a regulatory sandbox
domestic product (GDP), around 45 per cent to the manufacturing output and more than 40 per cent of exports and employment for a ''s
