The Design of Digital Financial Infrastructure: Lessons from India

39 Pages Posted: 18 Dec 2019

See all articles by Derryl D’Silva

Derryl D’Silva

Bank for International Settlements (BIS) - Office for Asia and the Pacific

Zuzana Filková

Bank for International Settlements (BIS)

Frank Packer

Bank for International Settlements (BIS)

Siddharth Tiwari

Bank for International Settlements (BIS) - Office for Asia and the Pacific

Date Written: December 15, 2019

Abstract

Digital finance has the potential to transform emerging market and advanced economies alike. India's approach rests on the principle of providing digital financial infrastructure as a public good. It offers an important case study where the results are relevant and applicable for all economies, irrespective of their stage of development. The provision of a national digital biometric identity to all residents has effectively granted them broad access to the banking system. The development of a real-time payment system platform has brought efficiencies to retail customers and small-scale transactions. By providing cheap and instantaneous payment services to ordinary citizens, the design of the Indian payment system challenges the business case for standalone private payment systems. The establishment of a legal framework for data fiduciaries promises to ensure that individuals can readily access the data generated by their online activity and dictate the circumstances for sharing those data.

Keywords: digital finance, financial inclusion, payment system, interoperability, data privacy, India Stack

JEL Classification: G28, H41, L15, L17, O33

Suggested Citation

D’Silva, Derryl and Filková, Zuzana and Packer, Frank and Tiwari, Siddharth, The Design of Digital Financial Infrastructure: Lessons from India (December 15, 2019). BIS Paper No. 106, Available at SSRN: https://ssrn.com/abstract=3505373

Derryl D’Silva (Contact Author)

Bank for International Settlements (BIS) - Office for Asia and the Pacific

78th floor, Two International Finance Centre
8 Finance Street, Central
Hong Kong

Zuzana Filková

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

Frank Packer

Bank for International Settlements (BIS) ( email )

CH-4002 Basel, Basel-Stadt
Switzerland
4161 280 8449 (Phone)

Siddharth Tiwari

Bank for International Settlements (BIS) - Office for Asia and the Pacific

78th floor, Two International Finance Centre
8 Finance Street, Central
Hong Kong

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