Finance Minister Nirmala Sitharaman calls for sustainable financial ecosystem

NEW DELHI:  Finance Minister Nirmala Sitharaman on Tuesday called for global cooperation and collaboration for a responsible financial eco-system.

Delivering the inaugural address at the Global Fintech Fest, she said discussions are underway on a global framework to regulate crypto assets, adding that cryptocurrencies could not be regulated efficiently without the cooperation of all countries.

“India’s (G20) presidency has put on the table key issues related to regulating or understanding that there should be a framework for handling issues related to crypto assets,” said the minister.

“Technology is a powerful tool through which we are going to bring a lot of changes and influence a responsible and inclusive financial ecosystem. But for technology to be effective, global cooperation is absolutely critical,” added Sitharaman.

The Union Finance Minister also said that threats to the global financial ecosystem, like physical border threats, cyber threats, crypto-threats, drug menace, tax havens and round-tripping of resources and tax evasions need to be deliberated upon. She asked banks and other financial institutions to ensure that their customers update nominees to help resolve the problem of unclaimed money in future.

“I want the banking system, the financial ecosystem including the mutual funds, stock markets to keep in mind that when someone deals with his (customer’s) money, the organisations will have to think about the future and ensure that customers nominate their heirs, give the name and address,” she added. She also asked fintech companies to invest heavily in robust security measures, utilising advanced encryption and other measures to protect user data and financial transactions.

A secured system is what will build trust and therefore that is a must for the financial ecosystem to truly flourish, she said, adding, that India can lead in making the financial ecosystem inclusive, resilient and sustainable as we have the tools but we have to make it responsible. She said fintechs have become a more robust and dynamic financial inclusion tool.

On how the fintech players have helped the country, the minister said in about last four years, the number of demat accounts has increased by 2.5 times from 4.1 crore in 2019-20 to 10 crore in 2022-23. On the increasing number of income tax return filings, she said the August data signals that the formalisation of the economy is now really wide and it is accessing so many different areas.

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