Finance Minister Urges RBI to Engage Monthly with Startups and Fintech Firms

Finance Minister Nirmala Sitharaman has urged the Reserve Bank of India (RBI) to conduct monthly meetings with startup and fintech firms to address their concerns, officials reported on Monday.

In a gathering with top executives from approximately 50 startup and fintech firms, Sitharaman also directed the Department of Financial Services to arrange a meeting between startups and law enforcement agencies. The meeting, crucially timed amidst RBI’s recent actions against Paytm Payments Bank, shed light on regulatory compliance within the fintech industry.

“During discussions, Sitharaman urged regulators, including the RBI, to hold virtual meetings monthly to address any queries or concerns of startups and fintech companies,” stated an official release following the meeting. Reassuringly, startup founders and fintech entities showed no specific worries related to Paytm during the meeting.

Representatives from Policybazar, MakeMyTrip, Razorpay, CRED, and venture capital firm PeakXV participated from the private sector, along with officials from SBI, NPCI, Canara Bank, and Bank of Baroda.

Startups also advocated for simplifying and digitizing KYC processes across fintech segments, along with proactive measures against cyber frauds, which the government promised to address under the new Digital India Act.

Furthermore, regulatory bodies will examine changes in ownership control of listed fintech companies to ensure alignment with compliance standards, while the DPIIT assured reduced turnaround times for patent applications. The meeting aimed to foster dialogue for enhancing operations and global competitiveness within the fintech sector, which boasts approximately 10,244 entities in India, the third-largest globally.

Acknowledging the sector’s rapid growth, Sitharaman welcomed suggestions to enhance ease of doing business and living, emphasizing the significant rise in startups from just over 300 in 2016 to over 1.17 lakh in 2023.

Key enablers such as Aadhar, UPI, and API Setu have played pivotal roles, simplifying company incorporations and recognizing P2P lenders as Non-Banking Financial Companies (NBFCs), thereby nurturing India’s vibrant startup ecosystem.