Responsible innovation

Govt intervention should address the concerns of fintechs

The recent regulatory action by the Reserve Bank of India (RBI) against Paytm Payments Bank has created significant unease in the system, particularly in the fast-growing fintech business. While the regulator has made it clear that action was taken after considerable bilateral discussion with the regulated entity, some believe it was a consequence of the regulator’s inadequate understanding of the nature of the business, which could stifle innovation. Such views against the regulator are not new in the financial sector. Regulatory intervention to contain risk and maintain financial stability, which affects the short-term growth of regulated entities, tends to invite