RBI Not Planning Harsher Rules for Fintech Sector After Paytm Strictness

In the last few years, the number of fintech companies has increased rapidly. Recently, the Reserve Bank of India (RBI) had banned the operations of Paytm Payments Bank. This has shocked the investors associated with this sector. However, RBI says that it does not plan to make strict rules for this sector.

In a Bloomberg report, RBI’s Executive Director (Enforcement), P Vasudevan, has been quoted as saying that strict rules are not being implemented for the fintech sector. He said that RBI wants these companies to regulate themselves. However, this Sector is expected to follow the rules on data privacy. RBI has tightened its grip on Paytm, one of the big companies in this sector. After several warnings about suspicious transactions between its payments app and banking unit, it has decided to cancel the license of Paytm Payments Bank. After this, there is a possibility of strict rules being implemented on companies associated with payment services.

Earlier this month, RBI Governor Shaktikanta Das had said that RBI wants the companies of this sector to grow. However, Crypto RBI’s position on the segment has not changed. Last year, RBI reiterated its demand to ban this segment. There have been many cases of scams related to this segment in the last few years.

Das had said, “We have clarified our position on crypto several times and we stand by it. The IMF-FSB synthesis paper also gives information about the risks in crypto. Regulation is on a scale of zero to 10. Zero regulation would mean that there is no regulation and it is open to all and 10 means that you do not allow it. FSB needs to act cautiously regarding regulation.” This paper argues against a complete ban on activities related to cryptocurrencies. It says that such a move could be costly and would be technically difficult to implement. Regulators in some other countries have also warned about the crypto segment.