'You have to comply with law': Rajeev Chandrasekhar's message to fintechs post Paytm

The Reserve Bank's regulatory action on Paytm Payments Bank has drawn the attention of fintech firms to the importance of complying with laws, Union Minister Rajeev Chandrasekhar has said.

The minister stressed that regulatory compliance cannot be "optional" for companies, rather it is an aspect every entrepreneur must pay full attention to.

Chandrasekhar - the minister of state for electronics and IT - said the issue of Paytm Payments Bank is a case where a hard-charging and aggressive entrepreneur has failed to realise the need for regulatory compliance, and that no company can get away if it is non-compliant with law.

Any company, be it from India or abroad, big or small, has to abide by the law of the land, the Minister asserted amid the unfolding Paytm Payments Bank Ltd (PPBL) crisis.

Chandrasekhar said the notion that RBI action on PPBL had rattled fintechs, was not a correct characterisation. The politician, entrepreneur and technocrat disagreed that the Paytm Payments Bank issue had raised worries about detrimental consequences for the entire fintech industry.

"And this notion that RBI... the regulator's action against Paytm Payments Bank has rattled fintech is... I don't think that's a correct characterisation.

"I think it has drawn the attention of fintech entrepreneurs, to the fact that you also have to know how to comply with the law. Regulatory compliance is not an optional thing for any country in the world, certainly not in India, and it is something that they (entrepreneurs) should pay more attention to," he said.

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Chandrasekhar further said that entrepreneurs typically tend to get so sharply focused on what they're building, that at times, they may lose sight of rules that have been laid down by regulators.

Chandrasekhar said he himself was a startup once and an entrepreneur once.

He said entrepreneurs and startups have a 'genetic flaw' that they get focused on what they're building and sometimes forget to understand there are some rules that have been laid down by the regulators.

"So I will put this down to that type of an error where a hard-charging entrepreneur, believes in himself, is building a company successfully (but) fails to realise that there are some regulatory do's and don'ts and there can never be a situation whether it's a social media company, or a fintech company, where somebody is not compliant with the law and expects to get away with it," the minister said.