It focuses on avoiding any regulatory or policy arbitrage and offers a level playing field to incumbents as well as competitors.

The report also maps prevalent business models in this domain and highlights the challenges presented by the ‘partnership model’ of neo-banking, due to a regulatory vacuum and in the absence of a digital bank licence.

NITI Aayog has releases report on Digital Banks proposing a Licensing and Regulatory Regime for India.

It focuses on avoiding any regulatory or policy arbitrage and offers a level playing field to incumbents as well as competitors.

‘Given the need for leveraging technology effectively to cater to the needs of banking in India, this report studies the prevailing gaps, the niches that remain underserved, and the global regulatory best practices in licensing digital banks,’ said CEO Parameswaran Iyer.

The report also maps prevalent business models in this domain and highlights the challenges presented by the ‘partnership model’ of neo-banking, due to a regulatory vacuum and in the absence of a digital bank licence.

The methodology for the licensing and regulatory template offered by the report is based on an equally weighted ‘digital bank regulatory index’.

Last year, NITI Aayog had released a discussion paper on the subject for wider stakeholder consultations. Comments received from 24 organizations were examined and have been suitably addressed in the final report