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Finance Minister Nirmala Sitharaman on Monday suggested a monthly meeting between fintech entities, startups and regulators.
This suggestion arose during a meeting with these parties following the Paytm controversy. Sources indicate that the controversy hasn’t notably unsettled either the fintech industry or regulators.
“Finance Minister suggested that the regulators may hold a meeting on a fixed day every month via virtual mode with the startup and fintech firms to address their concerns and issues,” an official statement said.
During the meeting, it was highlighted that India has approximately 10,244 Fintech entities, which is the third largest in the world.
It was suggested that Financial Services Department should conduct a day-long workshop with Law Enforcement Agencies (LEAs) wherein fintech ecosystem partners can voice their issues/concerns. A suggestion was that cost of lending/funding for critical areas including priority sector should be rationalised. “The meeting also deliberated upon simplification and digitisation of KYC across all fintech segments. RBI, DPIIT and Finance Ministry will look at the change of ownership holding/control of listed fintech companies to enable them to be in-sync with regulatory compliance,” the statement said.
During the meeting, DPIIT mentioned that new patent examiners have been added which will reduce the turn-around-time of patent applications. Additionally, it was assured that issues pertaining to cybercrime will be suitably addressed in the new Digital India Act.
It was also said that Aadhar, UPI, API Setu among others have acted as enablers for the startups. Simplified incorporation of companies, recognition of P2P Lenders as NBFCs, regulatory sandbox, Fintech repository and SRO Framework, etc. have facilitated the startups in India. The startups and fintech entities appreciated the processes and efficacy of GIFT City.
The meeting was called amidst the Reserve Bank of India’s recent actions against Paytm Payments Bank, highlighting the importance of regulatory compliance within the fintech sector.
On January 31, RBI barred Paytm Payments Bank Ltd (PPBL) from accepting any fresh deposits or top ups from customers after February 29 for not complying with regulations. The deadline was later extended till March 15.
Last week, RBI advised the National Payments Corporation of India (NPCI) to examine the possibility of migrating the users from PPBL to four to five other banks. PPBL has 30 crore wallets and three crore bank customers.
Despite reports suggesting concerns among startup founders and fintech companies regarding RBI actions, sources indicate that no such worries were expressed during the meeting.
“Paytm related anxiety/concerns were shown by the StartUp Founders and FinTech entities during the meeting,” a source said.
Top executives from private sector fintech companies such as RazorPay, PhonePe, Google Pay, and Amazon Pay, along with officials from NPCI, attended the meeting. Government representatives included Financial Services Secretary Vivek Joshi, MeitY Secretary S Krishnan, and RBI Deputy Governor T Rabi Sankar.
However, no representatives from Paytm were invited to attend the meeting.
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