New Delhi, Finance Minister Nirmala Sitharaman on Monday exhorted the Reserve Bank of India to hold monthly meetings with startup and fintech firms to address their concerns, officials said. At a meeting with top executives of about 50 startup and fintech firms, Sitharaman also asked the Department of Financial Services to organise a meeting between start-ups and law enforcement agencies.
The meeting with start-ups comes at a time when RBI’s action against Paytm Payments Bank has put the spotlight on regulatory compliance in the fintech industry.
“During the deliberations, Sitharaman exhorted the regulators, including RBI, that they may hold meetings via virtual mode once a month to discuss any questions/queries/concerns of the startups and fintech companies,” an official statement said, after the meeting.
Talking to reporters after the meeting, the official further said that no Paytm-related anxiety or concerns were shown by the startup founders and fintech entities during the meeting.
From the private sector, Monday’s meeting was attended by representatives from Policybazar, MakeMyTrip, Razorpay, CRED, and venture capital firm PeakXV.
SBI Chairman Dinesh Khara and officials from NPCI, Canara Bank and Bank of Baroda too were present at the meeting.
During the meeting, The start-ups also sought simplification and digitisation of KYC across all fintech segments and wanted the Government to be proactive in handling cyber frauds.
The Government assured the companies that cybercrime will be suitably addressed in the new Digital India Act, the Official statement said.
Besides, the RBI, DPIIT and the finance ministry will also to look at the change of ownership holding/control of listed fintech companies to enable them to be in sync with regulatory compliance, it added.
During the meeting, the Department for Promotion of Industry and Internal Trade (DPIIT) also assured that the turnaround time of patent applications will be reduced.
The interaction with the Start-up and Fintech ecosystem partners was organised to enable the free exchange of ideas to bolster and scale up operations to facilitate global competitiveness by enabling growth in the Fintech sector.
India has approximately 10,244 Fintech entities, which is 3rd largest in the world.
The Union Finance Minister noted the rapid growth of the Start-up and Fintech sectors of India, especially in the last decade, and welcomed suggestions from the FinTech leaders to achieve greater Ease of Doing Business and Ease of Living for consumers, an official statement said.
The number of startups in India has grown significantly from just over 300 in 2016 to over 1.17 lakh in 2023 as recognised by DPIIT, generating more than 12.4 lakh jobs, and 47 per cent of the startups have at least one Women Director.
Additionally, India is the home to over 10,000 Fintech companies working in diverse sectors and segments
From the government side, the meeting was attended by Financial Services Secretary Vivek Joshi, DPIIT Secretary Rajesh Kumar Singh and MeitY (Ministry of Electronics and Information Technology) Secretary S Krishnan. RBI Deputy Governor T Rabi Sankar was also present.
The statement further said that the meeting emphasised that innovative solutions by the Fintech companies are essential to the financial services sector while ensuring strict compliance with regulations.
It was noted that Aadhar, UPI, API Setu among others have acted as enablers for Start-Up and FinTech organisations and simplified incorporation of companies, recognition of P2P Lenders as Non-Banking Financial Companies ( NBFCs), regulatory sandbox, Fintech repository, SRO Framework for Fintech, etc have facilitated the startup eco-system in India, the statement added.
The startups and fintech entities appreciated the processes and efficacy of GIFT City, the official added.
