The discussion between Rishi Agrawal, CEO and co-founder of TeamLease RegTech, and businessline’s Lokeshwarri SK, sheds light on the sequence of events leading to the RBI’s decision to halt deposit-taking and certain operations of Paytm Payments Bank.

Agrawal explains that while the regulatory development may seem like a sudden reaction, it is actually the culmination of a series of issues dating back to 2018.

He highlights instances of non-compliance, including the submission of false information and violations of Know Your Customer (KYC) norms, which resulted in penalties imposed by the RBI.

Agrawal emphasises the importance of KYC compliance in maintaining trust and credibility in the financial system. He discusses how lax compliance can lead to vulnerabilities, potentially enabling nefarious activities such as money laundering and terrorist financing.

Agrawal also refers to concerns about data privacy in the fintech ecosystem, pointing out the lack of robust regulations and enforcement mechanisms.

The conversation touches upon the role of fintech companies in driving innovation and efficiency in the financial sector. However, Agrawal emphasises the need for these companies to prioritise compliance and regulatory adherence alongside growth objectives.

He warns about the dangers of overlooking compliance in favour of rapid expansion, citing examples of misconduct and data breaches. In conclusion, Agrawal underscores the importance of regulatory oversight in safeguarding the integrity of the financial system and protecting consumer interests.

He advocates stricter regulations, enforcement measures, and penalties to deter non-compliance and ensure accountability within the fintech ecosystem. Listen in.