EDB Signs Mou with Maharashtra Government

The Economic Development Board (EDB), the investment promotion arm of the Kingdom of Bahrain, signed a Memorandum of Understanding (MoU) with the Maharashtra Government to provide a framework for cooperation between the two authorities to promote FinTech in their respective markets.

The MoU was signed by Dr. Simon Galpin, EDB Managing Director, and S.V.R. Srinivas, IAS, Principal Secretary, Information Technology, Government of Maharashtra.

The MoU is in line with the EDB’s aims of exploring greater synergies between Bahrain and India in the financial technology space and will last for an initial period of three years.

Under the aegis of this MoU, the EDB and the Government of Maharashtra will support each other in promoting the FinTech environment education programmes, delegation visits and through the facilitation of cooperation between relevant parties such as financial institutions, universities/research institutions, technology experts, and government agencies.

‘’With this collaboration we stand at the frontier of a new future. We are going to work together to unlock a new generation of talent, creativity and innovation and be prepared for a future in which technology will be a game changer," S.V.R Srinivas said.

The collaboration will identify new areas of growth within the financial services sector and explore innovative projects in areas such as digital and mobile payments, blockchain and distributed ledgers, big data, flexible platforms (APIs), AML, eKYC, amongst other new technologies.

"We see this agreement as a model for forging wider and deeper business ties between our two countries," Dr. Galpin said. "This strategic partnership will introduce innovations that will further strengthen the landscape of the FinTech industry, which is widely regarded as the financial sector’s future, by enhancing traditional financial services delivery and technological innovations in financial literacy and education, retail banking and investment. Bahrain stands ready to learn from its close trading partner, whilst also sharing its own knowledge."

Bahrain has long been the home of finance in the Gulf Cooperation Council (GCC), and with the launch of Bahrain FinTech Bay, it has become one of the most concentrated FinTech ecosystems in the region, and a leading FinTech hub in the Middle East and Africa.

Additionally, with a dedicated FinTech unit, the Central Bank of Bahrain has devised and delivered a pro-innovation regulatory framework. This includes the region’s first onshore Regulatory Sandbox, established last year, which became a test-bed for FinTech start-ups.

The collaborative approach between Bahrain’s government and private sector has been instrumental in the advancement of FinTech growth and activities.

With Financial Services now accounting for 17 per cent of the total GDP, Bahrain is committed to enabling innovators across the FinTech ecosystem. "The FinTech sector in Bahrain is really going from strength to strength," Dr Galpin said following the singing of the MoU.

"We moved very quickly to put into place the right regulatory framework Now we need to promote the opportunities that Bahrain presents to Fintech companies outside Bahrain. " One of the most logical and accessible markets for us to reach out to is India because of activities and within India, we are focusing on Mumbai and the state of Maharashtra which is really the financial capital of India, he added.

"So, from our perspective, we are for the Indian scale up access to Bahrain, of course, access to our central bank, but also access to the broader Gulf Cooperation Council (GCC). We offer them potential to localize, to adapt their product service, perhaps to make it Shariah-compliant because it could go to wider Islamic market. But we also offer tremendous access to our Fintech companies, our licensed banking institutions. We have more than 400."

Bringing Indian capabilities in amending payment systems, robo-advisory and B to B blending does not just help Bahrain to broaden FinTech companies in Bahrain, but also upgrade and upscale the Kingdom's workforce and the banks already in Bahrain and make them more competitive, he added.

"Financial services are a very big component of Bahrain's GDP so ensuring our financial industry is competitive by giving it contact with Fintech community is very important for maintaining that aspect of our GDP," he said.

"The real benefit is not just in financial services. If we bring in Fintech services, there will be a much broader range of small and medium sized companies.

So, if we can bring in funding companies, payment service providers, that will be a new source of funding for our Bahraini entrepreneurs and locals SMEs. The implications are actually beyond just financial services." Srinivas added that EDB is a front player for the government of Bahrain. "The MoU is regarding various initiatives to be taken in FinTech area. FinTech area in Maharashtra is leading and we have our Fintech policy, particularly for the payments and insurance sector. We have many startups in Mumbai. We need support from Bahrain in the sector of investments, so we can mutually benefit. I am sure this MoU will take us forward, both of us."

Bhushan Gagrani, Principal Secretary to the chief minister of Maharashtra, said that the deep-rooted relations between Bahrain and India would benefit from the new technology, the financial instruments and the greater opportunities.

The FinTech that we signed with EDB will help with the regulatory system, the startup economic system and boost economic opportunities, he said. Dalal Buhejji, Senior Manager of the Financial Services at EDB, said that the FinTech service in Bahrain is very important.

"For us, in order to grow it further, we have to have some bilateral agreements across borders," she said.

"We always look at how we can build ties beyond Bahrain, and India is a very important market for us. Everybody is excited about this MoU that will build stronger relations between us and India and further promote the ecosystem in both countries. We are very excited about it and we look forward to seeing good results out of it."