India’s central bank warned about the growing presence of technology giants in the country’s digital financial services as well as payment systems which could pose a financial stability risk.
In its semi-annual financial stability report, the Reserve Bank of India (RBI) flagged concerns over what it called ‘Big Techs;’ saying they have the potential to become dominant players in financial services that risks them becoming “too-big-to-fail.”
“Specifically, concerns have intensified around a level playing field with banks, operational risk; too-big-to-fail issues, challenges for antitrust rules, cyber security as well as data privacy,” the RBI said in the report Thursday.
While the report does not specify companies or countries; India has seen massive interest from deep pocketed global technology players in recent years.
Amazon.com Inc. and Alphabet Inc. are among firms pouring billions of dollars into building payments ecosystems; linking retail networks of thousands of mom and pop stores; selling insurance and mutual funds on their apps and eating into banks’ digital market share.
Digital payments have grown to record levels with Walmart-backed Phonepe and Google Pay garnering the lion’s share of the retail market as the pandemic prompted people to move online.
The central bank’s concern comes at a time the largest U.S. internet firms are fighting new rules; issued by Prime Minister Narendra Modi’s government; in February that they say curtail privacy as well as free speech.
Officials have demanded Facebook Inc. and Twitter Inc. take down hundreds of posts this year; divulge sensitive user information as well as submit to a regulatory regime that includes potential jail terms for executives if companies don’t comply.
Support InfoStride News' Credible Journalism: Only credible journalism can guarantee a fair, accountable and transparent society, including democracy and government. It involves a lot of efforts and money. We need your support. Click here to Donate