RBI Allays Fears of Severe Fintech Regulations Аollowing Paytm Restrictions

The Reserve Bank of India (RBI) has given confirmation that it is not in line to enforce stringent rules to restrict the fintech domain in India. This statement comes from a senior functionary from the central bank, in the aftermath of the sudden restriction on many operations of Paytm Payments Bank, founded by eminent billionaire Vijay Shekhar Sharma.

An executive director at the RBI, P. Vasudevan, who is responsible for enforcement, affirmed that there are no plans for harsher fintech rules. The central bank, to the contrary, expressed a desire to observe self-regulation in the sector, with emphasis on adhering to rules pertaining to data privacy.

The comments by Vasudevan, who is a significant participant in shaping the country's payments landscape for the past decade, remain reassuring. This holds true while the central bank intensifies it's actions against payments companies that contravene norms around customer verification and data protection as defined by the RBI.

Paytm, supported by SoftBank Group Corp, has been under scrutiny by the regulator for a while now. The company has been warned regularly over the past two years pertaining to dubious transactions through its banking arm. Reports suggest that the RBI may cancel the Paytm Payments Bank Ltd. license soon.

Additionally, the regulator triggered panic among payment services providers by instructing a larger card network to discontinue specific operations. The regulator's justification was that the card network wasn't permitted to initiate a payment system without requisite authorization. Notwithstanding these actions, RBI authorities, inclusive of Governor Shaktikanta Das, stressed their support to the fintech sector, signaling their wish for these companies to cultivate growth.

Fintech Sector in India to Receive Milder Regulations, RBI Assures