Finance Minister Proposes Monthly Meetings Between Regulators and Fintechs to Address Concerns

• ByStartupStory     |    February 27, 2024

In the wake of the recent Paytm controversy, Finance Minister Nirmala Sitharaman has suggested monthly meetings between regulators and fintech entities to address concerns and foster collaboration. The proposal was made during a meeting with representatives from the fintech industry, emphasizing the need for continuous dialogue.

According to an official statement, the Finance Minister recommended that regulators hold virtual meetings on a fixed day each month to engage with startups and fintech firms. The suggestion comes as India boasts approximately 10,244 fintech entities, ranking it as the third-largest in the world.

During the meeting, it was revealed that the Financial Services Department could organize day-long workshops with Law Enforcement Agencies (LEAs) to allow fintech ecosystem partners to voice their concerns. Participants also discussed the rationalization of lending/funding costs for critical areas, including the priority sector.

“The meeting also deliberated upon simplification and digitization 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 highlighted.

The Department for Promotion of Industry and Internal Trade (DPIIT) reported the addition of new patent examiners to expedite the patent application process. Assurances were given regarding the incorporation of cybercrime considerations in the upcoming Digital India Act.

Notable enablers for startups, such as Aadhar, UPI, and API Setu, were acknowledged during the meeting. The gathering also praised initiatives like simplified company incorporation, recognition of P2P lenders as NBFCs, regulatory sandbox, fintech repository, and SRO framework.

The meeting took place against the backdrop of recent regulatory actions by the Reserve Bank of India (RBI) against Paytm Payments Bank (PPBL). Despite concerns in the industry, sources indicate that such worries were not expressed during the meeting.

“Paytm-related anxiety/concerns were shown by the startup founders and fintech entities during the meeting,” a source confirmed.

Representatives from prominent private sector fintech companies including RazorPay, PhonePe, Google Pay, and Amazon Pay attended the meeting, alongside officials from NPCI. Government representatives included Financial Services Secretary Vivek Joshi, MeitY Secretary S Krishnan, and RBI Deputy Governor T Rabi Sankar. Notably, no representatives from Paytm were invited to attend the meeting.

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