Modi urges regulators to take bigger steps against cyber fraud

Mumbai: Prime Minister Narendra Modi has said that India’s financial sector regulators need to do more to curb cyber fraud and raise the level of digital literacy.

Cyber frauds should not become an impediment to the growth of India’s startups and fintech companies, Modi said at the third and final day of the Global Fintech Fest in Mumbai on Friday. Indians reported 1.1 million cases of cyber frauds worth ₹7,489 crore in 2023, showed data presented in the Lok Sabha in February.

The prime minister said the government is making all necessary policy changes to assist the fintech sector, citing examples of withdrawing the angel tax, allocating ₹1 trillion to encourage research and innovation in the country and implementing the Digital Personal Data Protection Act.

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Angel tax had been introduced as an anti-money laundering measure. Union finance minister Nirmala Sitaraman, while presenting her Budget for 2024-25 in July, announced the abolition of the levy for all investors and asset classes.

Modi said that India’s fintech ecosystem will play a huge role in providing a quality lifestyle to the people of India. “I am confident that India's fintech ecosystem will enhance the ease of living of the entire world. Our best is yet to come,” said the prime minister.

Modi said fintechs have also played a big role in democratizing financial services. He cited examples of readily available loans, credit cards, investments and insurance, adding that fintechs have made access to credit easy and inclusive. Modi also mentioned the PM SVANidhi scheme meant for street vendors to avail collateral-free loans and expand their business with the help of digital transactions.

“India’s fintech revolution is playing a big role in improving the dignity of life and quality of life,” he added.

Modi said that the trinity of Jan Dhan, Aadhaar and mobile have broken down the mentality of ‘cash is king’ and made way for approximately half of the digital transactions in the world taking place in India. Launched in August 2014, the Pradhan Mantri Jan-Dhan Yojana (PMJDY) aims to provide universal access to banking services with at least one basic bank account for every household.

“India’s UPI (Unified Payments Interface) has become a major example of fintech in the world,” said Modi.

India recorded about 131 billion UPI transactions in FY24, up from 83.7 billion in FY23, Sitharaman said in April, citing NPCI data. In July, 14.44 UPI billion transactions worth ₹20.64 trillion were processed, up 45% year-on-year by volume and 35% by value. UPI is now available in seven countries outside India.

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According to Modi, there was a time when people used to come to India and be surprised to see its cultural diversity. “Now when people come to India, they are also surprised to see our fintech diversity. From landing at the airport, to street food, and shopping experience, India's fintech revolution is visible everywhere,” said Modi.

“In the last 10 years, more than $31 billion ha been invested in the fintech space. In 10 years, our fintech startups have increased by 500%. Cheap mobile phones, cheap data and zero-balance Jan Dhan bank accounts have done wonders in India,” he said.

Reserve Bank of India (RBI) governor Shaktikanta Das, speaking at the same event on Wednesday, said the number of fintechs founded in India were approximately at 11,000 and the sector has received investments of about $6 billion in the last two years alone.