Ex-RBI Deputy Governor Advocates Bank-Fintech Partnerships, Highlights Data Security

Former RBI Deputy Governor S S Mundra elaborated on the advantages of partnerships between banks and fintech companies at Bandhan Bank's foundation day lecture. He stressed the importance of data security and privacy, indicating that no core activities should be outsourced. Mundra also discussed the need for banks to promote financial inclusion and manage risks effectively.

S S Mundra, former deputy governor of the Reserve Bank of India, emphasized the potential benefits of bank-fintech collaborations during Bandhan Bank's foundation day lecture. He described such partnerships as mutually beneficial, akin to the relationship between a crocodile and a plover bird, where both entities gain from the alliance.

Mundra spotlighted that data security and privacy are paramount, advising against outsourcing core activities. He called for better risk management within banks, stressing that it should start from the outset rather than as a later compliance necessity. Furthermore, Mundra expressed his caution regarding the efficacy and adoption of digital currencies.

In closing, Mundra urged banks to enhance financial inclusion and tackle the challenge of data asymmetry between banks and their customers. The Reserve Bank of India has consistently warned about systemic risks linked to digitisation, reinforcing the need for robust risk management practices.

(With inputs from agencies.)