The rapid growth of the Fintech industry over the past decade has propelled it to a scale where it can no longer be overlooked by government or regulators. This growth has been fueled by India’s digital infrastructure, widespread smartphone adoption, deep penetration of digital platforms/ services, a regulatory environment that remains relatively unrestrictive, a robust startup ecosystem attracting venture capital, government initiatives promoting digital payments, and events like demonetization and the COVID19 pandemic. Consequently, it is now imperative for the government and regulators to adopt a holistic and strategic approach to fintech.
Unlike the clear regulatory frameworks governing Banks, NBFCs, PSPs, PAs, and PPIs, Fintechs find themselves navigating through a maze of guidelines such as LSP/DLA/FLDG, which have both direct and indirect implications for their business. While these guidelines are well-intentioned, their piecemeal implementation contributes to significant anxiety and uncertainty for Fintechs.
President & CEO
Fintellix (G2 Risk Solutions)
Therefore, it is essential for the government to establish clear and streamlined regulations for all Fintech entities. Such regulations should aim to eliminate uncertainty while fostering trust, stability, and transparency, all without stifling innovation.
Moreover, considering that we already have an NBFC category for Account Aggregators, which are essentially data intermediaries offering no financial services, it seems logical to have another NBFC category specifically tailored for Fintechs.