Amid rising incidents of cyber-enabled financial fraud and increasing digital transactions, State Bank of India (SBI) Chairman C.S. Setty has proposed the creation of a National Financial Grid (NFG) to establish a unified ecosystem for monitoring and preventing fraud across the financial sector. The proposal was made during the CII Financing Summit, where industry stakeholders discussed the evolving challenges and reforms required in India’s banking infrastructure.
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A Unified Layer for Fraud Risk and Governance
The proposed National Financial Grid will act as a centralized digital infrastructure, capable of integrating key financial data and compliance systems currently functioning in silos. According to Setty, the grid should encompass:
- Credit bureaus
- Fraud registries
- e-KYC verification systems
- Unified Payments Interface (UPI) framework
- Account aggregator system
- Unified Lending Interface (ULI)
“Can we build an open-access digital framework that connects all critical financial elements? A unified National Financial Grid can serve as the shared infrastructure for fraud and risk management across the ecosystem,” Setty said.
Industry Sets Up Digital Payment Intelligence Corporation
Highlighting recent collaborative efforts within the banking ecosystem, the SBI Chairman also confirmed the creation of the Indian Digital Payment Intelligence Corporation, a not-for-profit technology platform built to provide real-time intelligence inputs on fraudulent activity patterns. The initiative, backed by leading financial institutions, aims to enhance customer safety and improve operational risk oversight.
The platform will allow banks, payment companies, and financial intermediaries to monitor suspicious transactions, identify networks of repeat offenders, and collaborate on fraud prevention measures.
Digital Twin Proposed to Transform MSME Lending Framework
With India’s MSME sector continuing to face limited access to formal credit due to insufficient financial documentation and dependency on informal lending channels, Setty advocated the development of a ‘digital twin’ model.
Under this model, each MSME would have a consolidated digital identity integrating:
- Business transactional records
- GST and tax compliance
- Banking history
- Operational and supply-chain data
- Digital behavioural footprint
According to Setty, this approach would shift MSME lending from a relationship-based model to a data-driven, validated credit assessment system, thereby improving transparency, loan approval efficiency and access to credit.
- “There remains a significant unmet credit demand among MSMEs. A digital twin will help bridge the information gap and accelerate responsible financial inclusion,” he emphasized.
Public Sector Banks Need Technology Upgrades, Says Union Bank Chief
Speaking at the same summit, Ashish Pandey, Managing Director and CEO of Union Bank of India, stressed the urgent need to modernize outdated technology infrastructure, especially within public sector banks.
He highlighted two major areas requiring attention:
- Modernization of legacy IT systems to manage large-scale digital operations
- Workforce skilling to enable employees to operate emerging financial technologies effectively
According to Pandey, strong digital banking systems alone are insufficient unless supported by skilled human talent capable of managing cybersecurity, artificial intelligence, and data governance frameworks.
Future Outlook
As India continues to lead globally in digital payments and financial technology adoption, industry leaders believe coordinated digital infrastructure, intelligent fraud monitoring mechanisms, and data-led lending systems will play a central role in strengthening trust and enabling scalable financial growth.
The proposed National Financial Grid and digital MSME twin framework mark a significant step toward a more secure, transparent, and inclusion-oriented financial ecosystem.
