The crisis at
Paytm Payments Bank
has out strong focus on
regulatory compliance
in the county's fintech segment. The strict
RBI action
against Paytm Payments Bank is said to have created worry among a certain section of
fintechs
. A group of startup founders had also written to Sitharaman, seeking reassessment of the stringent action. In the backdrop of the RBI's action against Paytm Payments Bank, to reassure the industry that the sector remains a key priority for the government, the
finance Minister Nirmala Sitharaman
held a meeting with the heads of several fintech companies and startups
Sitharaman met startup and fintech stakeholders along with senior government officials and discussed issues related to cybersecurity, foreign direct investment policy, and data sharing. The meeting was attended by representatives of fintech firms such as Google Pay, PhonePe, Amazon Pay and RazorPay, as well as top officials of the National Payments Corporation of India (NPCI).
Plian and simple message: Zero compromise on compliance
During the meeting, Sitharaman emphasised the need for strict adherence to official regulations. She said that innovative solutions by fintech companies are essential to the financial services sector while ensuring strict compliance with regulations. Sitharaman reportedly made it clear that there can be no compromise over the compliance to regulatory norms whatsoever. The regulatory rules are sacrosanctand they need to be followed.
At the same time, the finance minister has also given the assurance that the fintech sector is seen as playing a key role in the Indian economy and various steps have been taken to nurture the ecosystem of these entities. The RBI, Department for Promotion of Industry and Internal Trade (DPIIT) and the finance ministry will look at the change of ownership holding or control of listed fintech companies to enable them to be in sync with regulatory compliance," the finance ministry said in a statement. The Department of Financial Services (DFS) will conduct workshops with the fintech industry and law enforcement agencies, the statement added.
The finance minister also asked the regulators, including the RBI, that they may hold meetings via virtual mode once a month to discuss any questions, queries, or concerns of startups and fintech companies.
Key action points
The finance ministry put out six action points after the meeting which included simplification and digitisation of KYC (Know Your Customer) across all fintech segments and interaction with law enforcement agencies to allow fintech firms to voice their issues or concerns.
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