In India, the local banking regulator has no intention of tightening the rules governing the fintech sector in this country.
The media, citing a statement by a senior official of the central bank of the mentioned South Asian country, reported that there were no plans for radical measures against the specified industry. It is worth noting that in recent weeks, fears and alarming forecasts have been actively circulating in the public space that in India, in the foreseeable future, regulatory measures for the fintech sector may be significantly tightened. The reason for this excitement, which formed something like a gloomy image of the future, was the sudden suspension of most of the operations of Paytm Payments Bank, which was founded by a high-flying billionaire, Rajai Shekhar Sharma.
P. Vasudevan, the executive director in charge of enforcement at the Reserve Bank of India, said late last week that tougher measures against the fintech sector are not expected. He is the very senior official who, as already mentioned, was referred to by the media. P. Vasudevan said that the central bank would be happy to see self-regulation for the fintech sector, but expected firms to comply with data privacy rules. He also noted that the Reserve Bank of India would like to have a free approach to regulating the financial technology industry.
P. Vasudevan’s comments can be characterized as a guarantee that in the foreseeable future, the fintech sector in India will not face a tightening of the regulatory system. The probability of this scenario does not decrease against the background of the fact that currently in the South Asian country, there is a distinct increase in the attention of the central bank towards companies providing payment services. In this case, stricter control is implied. At the same time, it is worth noting that the actions of the financial regulator are because some companies have a low level of compliance with standards for customer verification and data protection, which were placed by the central bank.
Paytm, which is a giant of the fintech sector of the South Asian country, is currently in the zone of increased attention from the Reserve Bank of India. This firm is backed by SoftBank Group. Over the past two years, the company has received numerous warnings about questionable dealings between its popular payment app and a lesser-known banking unit.
The media reports that the central bank may revoke the license of Paytm Payments Bank Ltd. by the end of the current month.
It is worth noting that concerns about the prospects of the fintech sector in India are not only related to the situation in which the mentioned payment company found itself. Last week, it became known that Visa and Mastercard suspended payments on commercial cards in the South Asian country. The companies made the appropriate decision on the instructions of the Reserve Bank of India. A Visa representative, in a comment to journalists, said that this firm had received a message from the financial regulator, which contains an industry-wide request about the role of suppliers of business payment solutions in relevant transactions.
Media reports that the specified decision of the Reserve Bank of India may be a measure in an attempt to stop the flow of money to sellers who have not been subjected to know-your-customer (KYC) procedures.
Officials of the central bank of the South Asian country, including Governor Shaktikanta Das, at the same time claim that the regulator supports the fintech sector and wants companies from this industry to grow.
As we have reported earlier, India to Review Tax on Online Gaming.
