 "FM-fintech companies meet on Monday: Compliance, innovation on table")
Finance Minister Nirmala Sitharaman will meet heads of several top fintech companies including Amazon Pay, Zerodha, LendingKart, Pine Labs, and Cred on Monday along with a deputy governor of the Reserve Bank of India (RBI) to discuss the ongoing regulatory issues in the sector.
According to sources, Paytm is unlikely to be a part of the meeting, which comes in the backdrop of RBI’s action against the company for persistent non-compliance with Know Your Customer (KYC) norms.
Besides private players, the meeting would also see participation from senior officials of the State Bank of India and the National Payments Corporation of India (NPCI).
The finance minister is expected to mediate between the companies and the regulator to strike a balance between ensuring regulatory compliance and encouraging innovation in the upcoming sector, sources said.
“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.
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Building the digital public infrastructure (DPI) has been high on the government’s agenda to accelerate financial inclusion. The recent G20 partnership for global financial inclusion report prepared by the World Bank highlighted that DPIs could bring legal and regulatory risks, insolvency risks which can endanger the ecosystem at large if some of its critical components were to become financially unsustainable. “Financial consumer protection risks could also be heightened by misuse of DPIs,” the report had said.
Chairing the 28th Financial Stability and Development Council (FSDC) meeting on February 21, Sitharaman asked financial sector regulators to step up measures to check the spread of unauthorised lending through online apps and its harmful effects.
The FSDC meeting also discussed formulating a strategy to simplify and digitalise the KYC process in the financial sector.