RBI can’t wish away fintechs from UPI just yet

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Editor's note: Reserve Bank of India deputy governor T. Rabi Sankar recently said at a conference hosted by the Indian Banks’ Association that banks have conceded the Unified Payments Interface market to a handful of fintech firms. “How is it that a system of transactions between two bank accounts has evolved in a way that most businesses are owned by non-banks? Clearly, banks have missed a step here.” The Times of India quoted Sankar as saying. “Probably the feeling that small-value transactions are an insignificant business to put your resources into.”  Interestingly, his comments came soon after the National Payments Corporation of India, or NPCI, extended the deadline for third-party apps to limit the market share of their UPI transactions to 30% of the total volume to December 2024. Sankar’s remarks elicited immediate responses from the industry, most notably from two banking and fintech veterans. Amrish Rau, chief executive of Pine Labs, tweeted: “It’s fashionable to beat up Banks. Fintechs (combined) would have invested north of 5Bn to drive UPI acceptance and issuance. Most banks are public[ly] listed and don’t have the …