FM Sitharaman to RBI: 'Hold monthly meetings with fintech firms to hear concerns'

Amid trouble in Paytm's banking unit, Finance Minister Nirmala Sitharaman on Monday interacted with leaders of startups and fintech firms such as GROWW, Zerodha, CRED, PhonePe, and others.

During the discussion, Sitharaman asked the regulators, including the RBI, to hold meetings via virtual mode once a month to discuss any questions or concerns of the startups and fintech companies.

Last month, the RBI barred Paytm's banking unit Paytm Payments Bank from taking deposits and credits from customers after March 15 for persistent non-compliance and material supervisory concerns in the bank. 

However, in today's meeting, no Paytm-related concerns were expressed by the start-up founders and fintech entities, sources told Business Today TV.

India has approximately 10,244 fintech entities, which is 3rd largest in the world. The Finance Minister noted the rapid growth of the start-up and fintech sector 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. 

During the meeting, it was 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, and 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.

During the meeting, it was decided that the Department Of Financial Services will conduct a day-long workshop with Law Enforcement Agencies (LEAs) wherein fintech ecosystem partners can voice their concerns. The stakeholders also agreed that the cost of lending, and funding for critical areas including the priority sector should be rationalised.

After the meeting, CRED founder Kunal Shah said: "Remarkable bias for action and initiative shown by policymakers with diverse responsibilities who came together for positive engagement with fintech startups. Grateful to the Finance Ministry and RBI for the frank exchange, encouragement, and belief in the role fintechs play in enabling India's economic and social ambitions."