In an exclusive interview with ETBFSI, the Joint Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, Sanjiv Singh, told that many more Public Sector Banks are set to come on board with Open Network for Digital Commerce (ONDC).
“Currently, many of the PSU banks are the shareholders of ONDC, and we are in talks to bring more of them on board,” the Joint Secretary told.
“Since they are governed by the Reserve Bank of India (RBI), this is still a work in progress due to the required regulatory clearance,” he said.
“Ideally, we will have a time when all the banks will be on ONDC. It is a matter of the necessary clearances from the regulatory body.”
Further talking about the role of banks in ONDC, he said, “Let me tell you, banks were the first to believe in ONDC. It is a non-profit organization, and the banks were the first to put-in their money as shareholders.”
Also Read: ONDC aims to democratise digital commerce with 70% SMEs onboard: Secretary, DPIIT
How to bring in more MSMEs on ONDC and digitise them?
“It is a very relevant question. Let me tell you, our first move was to digitise the undigitised. If India has to progress, specially in the case of manufacturing, MSME sector is the key,” Sanjiv Singh said.
Citing the example of the global ecosystem, the Joint Secretary said, “In countries like Taiwan, and Germany, it is their MSME sector that drive their manufacturing growth.”
“Similarly in India, we need to promote our MSMEs to a large extent, and to do this, ONDC is the best platform,” he maintained.
“If you go to big platforms, you will see that there is an algorithm that works in a way to decide what will be shown to the buyer. And for the big players, they are a brand in themselves. They don’t need to pay for being featured on any platform,” he said.
“In that sense, ONDC provides a platform to the small entities to get featured and sell their products with maximum reachability,” he added.
What helps small players in ensuring quality delivery?
The Joint Secretary said that since local vendors are featured on the platform, there is a sense of quality delivery amongst them.
Highlighting the impact that a local platform/business has on its audience, he cited an example of an auto ride-hailing app of Bengaluru, and mentioned how its success compelled the big ones to bring their rates down.
“There is a need for more local services and here the role of ONDC comes into play by providing them a platform to flourish.”
“Although ONDC is at an initial stage, we believe that it is flourishing very well, even in the areas where we haven’t envisaged,” he said.
What opportunities ONDC can bring in for FinTechs?
“See, the beauty of the ONDC lies in the fact that no one can predict how it will prosper and how it will become a game-changer for any sector,” the Joint Secretary said.
“ONDC provides opportunities to all the sectors including the FinTechs.”
“At ONDC, we have seen things unfolding in a manner which we ourselves have not thought of.”
“I met with many startup founders and asked them why don’t you follow a model where you can have a captive base for your product and you need not to go to the bigger platforms? You can have your own e-commerce platform embedded in your own set of things,” he told.
Elaborating the working model of ONDC, he said it is a network which provides a connect between a buyer and a seller. “On other platform, it is their buyer and their seller, but in the case of ONDC, it is the interoperability that is the key.”
He further said, “I would like to clear that ONDC is not a platform which is here to counter other platforms, but it is here with to provide a platform to any seller be it from a small village itself.”
“ONDC is not a platform per se, but a highway for sellers and businesses.”
What are the 5 year plans of ONDC?
“ONDC is on its growth journey, and we have to focus not only on growth, but we also have to ensure that we have a robust grievance redress mechanism where we can sort out all the grievances being raised on ONDC,” he said.
