India's central bank has asked fintech and digital payment companies to ensure responsible innovation and improved compliance, while promising a more consultative approach.

Governor Sanjay Malhotra of the Reserve Bank of India met with non-bank payment system operators and fintech companies in Mumbai. The central bank chief stated that he expects "responsible innovation and emphasized the need for ensuring compliance by entities who are new to the regulatory space," according to the RBI.

The central bank stated that the regulator would continue to adopt a "consultative approach," noting that modern technology firms like account aggregators and payment system players were crucial to the growth of India's economy and financial system.

The industry, which has been severely impacted by his predecessor Shaktikanta Das' crackdown on negligent companies, is probably going to feel better after hearing Malhotra's most recent remarks. The RBI loosened some of its stringent regulations last month, declaring that banks are no longer obliged to reserve extra risk weights for loans to non-banking financial firms with higher ratings.

The fintech firms provided feedback on the evolving payment and fintech ecosystems, as well as their expectations from the central bank, according to the RBI.