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Focussing on the fintech and digital banking future of the Indian market, the Union Budget 2022 saw several interesting announcements from finance minister Nirmala Sitharaman. The FM announced that in 2022, 100% of post office banks will come under the core banking umbrella to boost financial inclusion. This will enable digital banking and other modern fintech services for farmers and other rural enterprises, such as netbanking, digital subsidies, online transfer of funds from one post office to another just like any other banks.

In order to boost adoption of digital banking services further, FM Sitharaman said that to mark 75 years of India’s independence, 75 digital banking units in distinct districts will be set up by scheduled commercial banks. It is as yet unclear what such an digital banking unit will entail. Coupled with the digitalisation of post office-run banking services, it is a clear sign that the government is looking to push digital banking in rural and semi-urban India.

Further, the allocation announced last year to boost digital payments will continue in 2022-23 as well, the finance minister added. Last year, Sitharaman had allocated INR 1,500 Cr to promote digital transactions and boost digital modes of payment in rural and under-served areas. The government will also look to boost the overall fintech ecosystem by promoting the use of payments platforms that are economical and user-friendly.

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