Reserve Bank of India (RBI) Governor Shaktikanta Das has said that FinTech companies in India have to pay close attention to governance and data protection.“FinTechs should pay close attention to governance, business conduct, data protection, customer centricity, regulatory compliance and risk mitigation frameworks,” he said.
RBI said that industry participants shared their inputs and suggestions to enhance and deepen the role of FinTechs and the related ecosystem in the country. The meeting was also attended by RBI Deputy Governor Shri M. K. Jain and a few senior officials of the RBI.
“In his introductory remarks, the Governor stated that FinTech initiatives and start-ups are important segments of aspirational India. They are playing a transformative role in the financial system through digital innovations and innovative means of delivery of financial services,” RBI said.
The Governor also highlighted the proactive and supportive role of the RBI in providing a conducive policy environment for responsible innovation.
The Governor reiterated that the RBI will continue to adopt a participative and consultative approach for facilitating innovations in the financial sector.
This year, the central bank took multiple steps to crack down on lending through prepaid payment instruments (PPI), including prepaid cards and wallets. Finally, the digital lending norms barred the presence of third-party accounts in the flow of lending, effectively mooting lending through PPIs.
The meeting marks a shift in the relationship between FinTechs and RBI, after the norms struck down the core business models of multiple FinTechs.
According to industry sources, RBI officials also met with digital lending FinTechs on December 9. The regulator is likely to hold more consultations in the coming months.
An industry source said on the discussions held in the previous meeting, “The discussions revolved around what more can be done for the sector. The regulator was very receptive. We believe this is the start of multiple rounds of discussions that may happen.”
