Including Amazon Pay, Zerodha, LendingKart, Pine Labs, and Cred on Monday along with a deputy governor of the Reserve Bank of India (RBI), Finance Minister Nirmala Sitharaman will meet heads of several top fintech companies to discuss the ongoing regulatory issues in the sector.
As per the sources, it is said that Paytm won’t be the part of this meeting pertaining to the RBI’s action against the company for continuous non-compliance with Know Your Customer (KYC) norms.
State Bank of India and the National Payments Corporation of India (NPCI) will also be the part of the meeting apart from the aforementioned players.
And to strike a balance between ensuring regulatory compliance and encouraging innovation in the upcoming sector, the finance minister is expected to mediate between the companies and the regulator, said sources.
“The minister is likely to ask the companies to make sure their compliances such as KYC are in order, and at the same time ask the regulator to ensure that the compliance burden is not so high that it discourages innovation,” said a source.
Paytm did not respond to queries sent by Business Standard till press time. Most of the companies invited to the meeting preferred not to comment. Building the digital public infrastructure (DPI) has been high on the government’s agenda to accelerate financial inclusion.
Report prepared by the World Bank with respect to the recent G20 partnership for global financial inclusion highlighted that DPIs could bring legal and regulatory risks, insolvency risks which can endanger the whole ecosystem if there is a financial instability in some of its crucial components.
“Financial consumer protection risks could also be heightened by misuse of DPIs,” the report had said.
Sitharaman, who chaired the 28th Financial Stability and Development Council (FSDC) meeting on February 21st asked financial sector regulators to take strict measures when it concerns the spread of unauthorized lending through online apps and its harmful effects. This session also shed light on devising a strategy to simplify and digitize the ever important KYC process in the financial sector.
