RBI Not Planning Harsher Rules for Fintech Sector After Paytm Strictness

Bloomberg’s report quoted RBI Executive Director (Enforcement), P Vasudevan, 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 comply with regulations on data privacy. RBI has tightened its grip on Paytm, one of the big companies in this sector. After several warnings regarding suspicious transactions between its payments app and the banking unit, it has decided to cancel the license of Paytm Payments Bank. After this, there is a possibility of strict rules being implemented to the companies related to payments services.

Earlier this month, RBI Governor Shaktikanta Das had said that RBI wants the companies in this sector to grow. However, there has been no change in RBI’s position regarding the crypto segment. Last year, RBI had reiterated the demand to ban this segment. In the last few years, there have been many cases of scams related to this segment.

Das had said, “We have clarified our position on crypto many times and we stand by it. The IMF-FSB’s synthesis paper also gives information about the risks in crypto. Regulation is on a scale of zero to 10. Zero Regulation would mean no regulation and it is open to all and 10 would mean you do not allow it. The FSB needs to be careful about regulation.” In this paper, an argument has been made against a complete ban on activities related to cryptocurrencies. It said such a move could be costly and would be technically difficult to implement. Regulators in some other countries have also warned regarding the crypto segment.