Prospects and Likely Challenges in Open Banking with special reference to India

Over the last few years, we have observed development in Open Banking across the World, especially European Union countries and UK both of which played pioneering role in implementing this new paradigm in banking under the careful supervision of their regulatory bodies. Considering the pace at which open banking has been making strides at various other parts of the world too, it seems to be a question of 'when' rather than 'whether' it will be embraced by India in a wholesome manner. The plausible explanation for the growing acceptance of open banking may be attributed to inter alia impressive range of benefits it confers on customers, the growing awareness of customers about the value of their own financial data, astounding growth of digital technology and regulatory capability to handle the open banking regime. At the same time, Open Banking poses varied challenges to various stakeholders. This article seeks to examine both the prospects of open banking in India and also the likely challenges its introduction may pose to various stakeholders, including customers, regulators, legislative bodies, banks and other service providers in the country.