An inter-ministerial panel on fintech has suggested legislative changes be made to enable fixed deposits (FDs) and other financial instruments to be issued in dematerialised form as it is customer-friendly and secure. The Steering Committee headed by the Economic Affairs Secretary also suggested that the Department of Financial Services (DFS) and Reserve Bank of India may examine the suitability of ‘virtual banking system’ in the Indian context.
The panel, which submitted its report to Finance Minister Nirmala Sitharaman on Monday, said dematerialisation of financial instruments is customer-friendly given the wide reach of mobile technologies and also leads to disaster resilience and speedy recovery.
It recommended that suitable regulatory and legislative changes be made to enable FDs and other financial instruments to be issued in dematerialised form and allow their frictionless use as collateral.
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The government should undertake a campaign to convert all financial assets held, especially by entities under its control like post offices, in demat form as far as possible but certainly in electronic form, the report said.
Further, as per the report “Necessary suitable amendments to enable dematerialisation of financial instruments such as FDs and other deposits of the Post Offices, other forms of small savings certificates issued, Gold Deposit Certificates issued under GMS, Sovereign Gold Bonds, etc. may be undertaken”
Source: Economic Times
