Fintechs need to ensure that they keep a balance between regulatory requirements and innovation and work towards resolving challenges faced by banks, Financial Services Secretary Vivek Joshi said on August 7.
“Fintechs should work hand-in-hand with banks. Right balance is needed between between innovation and regulatory response for fintechs,” Joshi said at the Picup Fintech conference organised by industry body FICCI.
One of India's premier start-ups in the financial sector space, Paytm, had run into trouble with banking regulator Reserve Bank of India (RBI) in January. In February, Finance Minister Nirmala Sitharaman, RBI Deputy Governor Rabi Sankar, and other government officials had met around 40 fintech entrepreneurs, non-fintech founders and think tanks.
The RBI has started having monthly discussions with fintech ecosystem on technological requirements to allay their apprehensions. Finance ministry officials will meet the fintechs again, Joshi said.
The financial services secretary said that fintechs need to reverse their approach to innovations for the sector. “Instead of approaching the banks with an innovative solution it would be more appropriate if banks suggest and then fintechs develop the required solution. Many banks have started empanelling fintech startups for this reason,” he said.
Fintechs can also help banks increase the digital lending capacity to MSMEs, he added.
India has highest fintech adoption rate, compared to the global average.
“High-end sustained economic growth would not have been possible without the contribution of fintech,” Joshi said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
