While the government has made it clear that there can be no compromise over the compliance to regulatory norms, it 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
New Delhi:
Finance Minister Nirmala Sitharaman on Monday held a meeting with the heads of several fintech companies and startups during which she emphasised the need for strict adherence to official regulations and giving paramount importance to the protection of consumer interests, a senior official confirmed.
It was decided in the meeting that Department of Financial Services (DFS) will conduct a day-long workshop with law enforcement agencies (LEAs) wherein fintech ecosystem partners can voice their issues/concerns.
The Department for Promotion of Industry and Internal Trade (DPIIT) also mentioned that new patent examiners have been added, which will reduce the turn-around time of patent applications.
The other points that emerged were that; the cost of lending/funding for critical areas, including the priority sector, should be rationalised; Simplification and digitisation of KYC across all fintech segments; RBI, DPIIT and MoF to look at the change of ownership holding and control of listed fintech companies to enable them to be in sync with regulatory compliance; Issues about cybercrime will be suitably addressed in the new Digital India Act.
The meeting, which took place in the backdrop of the RBI action against Paytm Payments Bank, 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).
While the government has made it clear that there can be no compromise over the compliance to regulatory norms, it 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.
Top government officials who attended the meeting included Financial Services Secretary Vivek Joshi, DPIIT Secretary Rajesh Kumar Singh, MeitY (Ministry of Electronics and Information Technology) Secretary S. Krishnan, and RBI Deputy Governor T. Rabi Sankar, among others.
The number of startups in India has grown significantly from just over 300 in 2016 to over 1.17 lakh in 2023 as recognised by DPIIT, generating more than 12.4 lakh jobs, and 47% of the startups have at least one Women Director.
Additionally, India is home to over 10,000 fintech companies working in diverse sectors and segments.
The Union Finance Minister also noted that India’s fintech ecosystem is the 3rd largest in the world and growing at 14% CAGR and that the RBI recently floated a draft framework for the recognition of self-regulatory organizations (SROs) for the fintech sector for stakeholder consultation.
The RBI had barred Paytm Payments Bank Ltd (PPBL) from accepting deposits after February 29. However, this date was extended to March 15 “keeping in view the interest of customers (including merchants) of PPBL who may require a little more time to make alternative arrangements and the larger public interest”, the RBI said.
“No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after March 15, 2024 other than any interest, cashbacks, sweep in from partner banks or refunds which may be credited anytime,” the RBI order said.
However, the RBI has also advised NPCI to examine the possibility of migrating the users from PPBL to some other banks so that consumers do not suffer due to an abrupt disruption.
IANS