FinTech firms are redefining the way companies and consumers conduct transactions by offering a wide range of financial products and services and promoting financial inclusion. FinTech stands for 'Financial Technology’ and is described as technologically enabled financial innovations. Over the past few years, FinTech companies have had a substantial impact on the financial services sector worldwide. With the primary focus of the FinTech entities in India being on raising capital and accelerated growth through innovative solutions, it is important to understand some of the key financial reporting and accounting considerations for common transactions entered into by FinTech entities in India. In this edition of Accounting and Auditing Update (AAU), we aim to highlight the key considerations for entities in FinTech sector.

The Reserve Bank of India (RBI) has been focussing its attention to the evolving and dynamic FinTech sector and has been developing guidelines and regulations relating to FinTech and digital banking. We have another article on FinTech sector that aims to provide an overview of RBI’s recent circulars and guidelines in relation to the FinTech industry.

Central Bank Digital Currencies (CBDCs) are digital versions of a country’s physical currency. Many countries across the globe are exploring CBDCs, few have even implemented them. In October 2022, RBI issued a ‘concept note’ on Central Bank Digital Currency with an objective to create awareness about the planned features of the digital rupee. CBDC is aimed to complement, rather than replace, current forms of money and is envisaged to provide an additional payment avenue to users. The article on this topic discusses the key motivations and objectives for a CBDC, design and technology choices available and examine the policy and other implications of introducing CBDCs in India

As is the case in each month, we have also included a regular round-up of some recent regulatory updates in India.

We would be delighted to receive feedback/suggestions from you on the topics we should cover in the forthcoming editions of AAU.