 "FM Nirmala Sitharaman asks fintechs to blend innovation, compliance")
At a rare meeting with fintech leaders on Monday, Finance Minister Nirmala Sitharaman encouraged new-age firms to continue to innovate while keeping a close watch on regulatory norms. The meeting, which was called in the backdrop of the recent Reserve Bank of India action on Paytm Payments Bank for violations of rules, did not discuss any specific case.
But, the FM suggested that regulators including the RBI, should hold monthly virtual meetings with startups and fintech firms to address their concerns and issues.
In addition, the Department of Financial Services has been asked to conduct a day-long workshop with law enforcement agencies where fintech ecosystem partners can voice their issues and concerns. The objective was to contain any fears or apprehensions of the industry in the current context, a fintech source said.
Sitharaman, while chairing the meeting, stressed that “innovative solutions’’ by fintech companies are essential to the financial services sector. However, they must ensure strict compliance with regulations, she added.
Sitharaman has also sought suggestions from fintech leaders to achieve greater ease of doing business and ease of living for consumers.
Also Read
Sources aware of the discussions indicated that the startup founders and fintech entities did not show Paytm-related anxiety or concerns during the meeting with the FM.
The meeting decided that the RBI, Department for Promotion of Industry and Internal Trade (DPIIT) and the finance ministry would also look at the change of ownership holding and control of listed fintech companies to enable them to be in-sync with regulatory compliance.
“The interaction with the startup and fintech ecosystem partners was organised to enable free exchange of ideas to bolster and scale up operations to facilitate global competitiveness by enabling growth in the fintech sector,” a statement issued by the finance ministry said.
Government would look into rationalising the cost of lending and funding for critical areas including the priority sector and also simplification and digitisation of KYC across all fintech segments, the press statement said.
Issues related to cybersecurity, FDI policy, data sharing, were discussed during the meeting. The processes and efficacy of GIFT City, in Gujarat, also came up.
Top government officials including Vivek Joshi, Secretary, Department of Financial Services; Rajesh Kumar Singh, Secretary, Department for Promotion of Industry and Internal Trade; S Krishnan, Secretary, Ministry of Electronics and Information Technology; and T Rabi Sankar, Deputy Governor, Reserve Bank of India were present in the meeting.
Heads of various startups and fintech companies and various associations such as Fintech Association for Consumer Empowerment, Digital Lenders’ Association of India, Payment Council of India, and Fintech Convergence Council attended the meeting.
"A lot of discussion happened about how cyber frauds can be collectively tackled, and on improving coordination with the enforcement agencies, better monetisation options for payment platforms,” said sources
With approximately 10,244 fintech entities, India has the third largest fintech sector in the world, growing at 14 per cent CAGR.
“Aadhar, UPI, API Setu among others have acted as enablers for the startups. Simplified incorporation of companies, recognition of P2P Lenders as NBFCs, regulatory sandbox, fintech repository, SRO framework for fintech, etc have facilitated the startups in India,” a source said.
DPIIT highlighted during the meeting that new patent examiners have been added to reduce the turn-around-time of patent applications.