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PGDM department conducted the guest session on the topic “Impact of Fintech, Cryptocurrency and CBDC on financial inclusion and stability in Indian context”. The session was delivered by Mr. Vineet Ranjan, Deputy VP Oaknarth India Pvt. Ltd, Gurgaon on 10 th Feb 2023 for PGDM batch (2022-24) students.

The session started with the general discussion of the financial inclusion in the country like how 30-40 years back, economic transactions used to take place on cash basis and how it transformed to online real time transactions and now to whole new digital currency i.e. CBDC.

Central Bank Digital Currency (CBDC) is a digital form of currency notes issued by a central bank. While most central banks across the globe are exploring the issuance of CBDC, the key motivations for its issuance are its convenience, transferability and cost effectiveness. The speaker has cleared the following concepts to the students:

Why CBDC is required in India?

• To cut down Indian dependency on US.
• To develop a centralized system to counter the problem of money laundering and terrorist funding.
• To find an alternative for paper money.
• To monitor the flow of money.
• To reduce the time or the process of money transfer.
  • Bank to bank transactions takes 2-7 days.
  • Through CBDC it will take 20 seconds only.

• Financial inclusion in rural areas are in the following ways:
  1. Jan Dhan Yojana
  2. RRB
  3. Postal banks (IPPB)
  4. PSL - PSL tie up with fintech (dhani)
  5. Direct organisation through banks
  6. KYCs are being done at door step service at real time through Iris scan.

• How fintech gives loan to farmers?
  1. The loan gets sanctioned very easily if the borrower has the fixed level of income coming their bank account. But the main problem with the farmers are that the sale amount which they receive by selling their crops in mandi is in cash. So, they don’t have any fixed income or proof for the same.
  2. So fintech consider the following parameters to grant them loans:
     • Area of the land
     • Last 3 years yield
     • Determine the loan capability of the farmer

• Blockchain- A blockchain is a type of distributed database or ledger—one of today's top tech trends—which means the power to update a blockchain is distributed between the nodes, or participants, of a public or private computer network. This is known as distributed ledger technology, or DLT.
  1. Since there is no track from where the transaction has been started and who is the last receiver of the respective funds therefore there are some drawbacks of blockchain.
     • Money laundering
     • Speculation
     • Terrorism
• Currently there are four countries which are making use of CBDC i.e. Russia, Hongkong, China, UAE
• In Indian rural areas the role of RRB (regional rural banks), NABARD and Post Offices is to provide the individuals living in this area with credit facilities.
• CIBIL- Credit Information Bureau India Ltd.: It is a body which releases a score depicting the credit worthiness of a particular individual.
• Prerequisites of getting a Loan Sanctioned:
  • Documentation
  • Income proof
• Financial inclusion in crypto. Why it is required?
  • The benefit of financial inclusion in crypto is zero cost or low cost of sending remittances to friends and family.
  • No interest mechanism.
  • Legal tender.
  • Alternative to shift transfer.
• First crypto was traded in 2009.
• Neo Banking: Neo means new. These are new age banks without any physical location, present entirely online.
• Mudra Loans: It provides loans at lower rates to MFI and NBFI which then provide credit to MSME’s.

Overall the session was very engaging and informative.