Big Tech push into Indian financial sector raises concerns, central bank says
MUMBAI, July 2 (Reuters) – Big Tech’s plans to deepen India’s financial sector pose risks for traditional banks as tech companies have the potential to become dominant players in financial services, the central bank said .
The plans will also create governance challenges for regulators, the Reserve Bank of India (RBI) wrote in its semi-annual financial stability report on Thursday.
Big tech companies “straddle many different industries with sometimes opaque global governance structures,” he said.
The RBI said concerns included operational risks, issues too big to fail, challenges for antitrust rules, cybersecurity and data privacy. But he added that the positive results could include efficiency gains and better access to financial services.
Amazon.com Inc (AMZN.O) and Google currently provide basic payment services in India. The two companies along with Facebook (FB.O) and others have applied for licenses to operate broader retail payment and settlement systems in partnership with Indian companies such as Reliance (RELI.NS) and lenders.
The central bank’s warnings come at a time of great tension between the Indian government and US tech giants over issues ranging from e-commerce rules to data privacy and the content posted on their platforms. Amazon, Facebook, Facebook-owned WhatsApp and Twitter have all been caught up in disputes with New Delhi.
India’s largest state-owned bank and UNI Global Union, which represents around 20 million workers globally, last month also raised concerns over the entry of large tech companies into the country’s payments industry. country. Read more
Reporting by Nupur Anand; Editing by Edwina Gibbs
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