FM suggests RBI to hold monthly meetings with fintechs, startups via VC: Source

Union Minister for Finance Nirmala Sitharaman chairs the meeting with StartUp and FinTech ecosystem entities, in New Delhi

Union Finance Minister Nirmala Sitharaman on February 26 suggested the Reserve Bank of India (RBI) hold monthly meetings with fintech companies and start-ups via videoconference, sources said. She was speaking at a crucial meeting with representatives from the fintech industry to address various concerns and discuss key issues facing the sector.

The finance ministry released six action points following a meeting attended by RBI deputy governor T Rabi Sankar, SBI chairman Dinesh Kumar Khara, and officials from the National Payment Corporation of India (NPCI), among others. These action points encompass the simplification and digitization of KYC (Know Your Customer) processes across all fintech sectors and the facilitation of interactions between fintech firms and law enforcement agencies to address their concerns or issues.

The meeting comes in the backdrop of an RBI clampdown on Paytm Payments Bank (PPBL) over several compliance violations.

The meeting focused on understanding the challenges and opportunities within the fintech space and covered a range of topics vital to the industry's growth and security.

Among the issues raised and discussed during the meeting were concerns related to cyber security, with an emphasis on strengthening safeguards to protect digital financial systems.

One significant aspect addressed was compliance with Know Your Customer (KYC) regulations. Another noteworthy point of discussion involved the dual listing of foreign equities of fintech companies.

Sources have indicated that there were no expressions of anxiety or concerns related to PayTM by Startup Founders and FinTech entities during the FinTech meeting.

A source said that a total of 40 startups were in attendance at the meeting. Additionally, Fintechs sought clarification on Foreign Direct Investment (FDI).

The meeting was also attended by Union Minister of State for Finance Bhagwat Kishanrao Karad; Vivek Joshi, Secretary, Department of Financial Services (DFS); Rajesh Kumar Singh, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT); S. Krishnan, Secretary, Ministry of Electronics and Information Technology (MeitY); T. Rabi Sankar, Deputy Governor, Reserve Bank of India (RBI); Founders/ Co-Founders/ MDs/ CEOs/ Heads of various Start-ups and Fintech companies and various Associations such as Fintech Association for Consumer Empowerment (FACE), Digital Lenders’ Association of India (DLAI), Payment Council of India (PCI), and Fintech Convergence Council (FCC).

According to Finance Ministry, the number of Start-ups in India has grown significantly from just over 300 in 2016 to over 1.17 lakh in 2023 as recognised by DPIIT, generating more than 12.4 lakh jobs, and 47 percent of the Start-ups have at least one Women Director.