MUMBAI: Almost two decades after Bill Gates made the provocative statement, banking would be needed, but banks themselves would not, it is still resonating with the banking regulator in India. In the first Fin Tech Summit organized jointly by FICCI, NASSCOM and IBA, RBI Deputy Governor R Gandhi told the gathering that banks were no longer doing banking exclusively. Gandhi also warned about innovation and said that it could be bad per se as sometimes even good innovation can be misused.
“Banking is no longer what a bank does it is also what a non-bank does,” Gandhi said. “Banks are no longer those entities which do banking exclusively now others are also doing banking.”
He also said that specialized financial technology start-ups were eating in to business of banks and growing exponentially.
“Chunking of banking is a norm and there are specialized entities performing that function,” the RBI deputy governor said. “Chunking away business from banks has given enormous growth to non-banks.”
Gandhi also raised concerns over the popularity of virtual currencies like Bitcoins and said that it wouldn’t lead to end of the currency system even though predicting it was fashionable. “The emergence of Bitcoins has led to some quarters predicting the end of the currency system itself,” he said. “In my mind it may remain a pipe dream that block-chain will eliminate currency.”