Paytm Payments Bank Effect: FM Seeks Monthly Meetings Between RBI, Fintech Sector

In the wake of regulatory action against Paytm Payments Bank, the finance minister chaired a meeting with representatives of the fintech ecosystem in New Delhi on Monday, where regular meetings between the Reserve Bank of India and the fintech industry was mooted.

Finance Minister Nirmala Sitharaman urged the central bank and other regulators to earmark one day in a month to meet startup entities and fintech firms to help the latter air their concerns, a government official with knowledge of the matter said.

This is expected to be held on a fixed date every month so that industry members can join via video conferencing and seek an audience with the regulator, the official cited earlier said.

A fixed date, however, is yet to be decided by the regulators, NDTV Profit has learned.

Action related to Paytm Payments Bank didn't elicit anxiety or concerns from the startup founders or fintech entities, the same official said.

One of the attendees from the industry who wished to remain anonymous noted that the meeting on Monday saw the participation of 40-42 representatives where the concerns of fintech start-ups and their founders were heard.

About 10 companies requested the meeting, where they raised general concerns extending into the realm of enhancing cyber security and building on the fintech repository so that aggregated data could be mutually shared, a second government official clarified on the condition of anonymity.

In December, the central bank stated that it would be working on setting up a fintech repository, which would help increase the transparency of fintech-enabled lending.

The RBI's plan calls for a Fintech Innovation Hub, which would encourage fintech to voluntarily share information, and it hopes to see it become operational by April 2024.

The second official noted that the industry raised concerns regarding increasing cyber security issues and sought greater engagement with the government to resolve them.

Other topics of discussion, according to a release on the matter, include:

• DFS to conduct a day-long workshop with law enforcement agencies (LEAs) wherein fintech ecosystem partners can voice their issues and concerns.

• DPIIT mentioned that new patent examiners have been added, which will reduce the turn-around time of patent applications.

• The cost of lending and funding for critical areas, including priority sectors, should be rationalised.

• Simplification and digitisation of KYC across all fintech segments.

• The RBI, DPIIT and MoF to look at the change in ownership and holding/control of listed fintech companies to enable them to be in sync with regulatory compliance.

• Issues pertaining to cybercrime will be suitably addressed in the new Digital India Act.

Summing up the meeting, the second official quoted above said that the need for a 'regular and fixed forum' for fintech to air their concerns was highlighted.

The same official added that the finance minister also urged that a meeting between the industry, law enforcement, including DGGI, ED, and CBI, and the ministry of finance be held within a month.

Apart from the Union Finance Minister, the meeting was attended by RBI Deputy Governor T. Rabi Sankar, Secretary Vivek Joshi of the Department of Financial Services (DFS), Rajesh Kumar Singh, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT), and S. Krishnan, Secretary at the Ministry of Electronics and Information Technology (MeitY), along with representatives from various start-ups and fintech companies.