THE Reserve Bank of India (RBI) would like to adopt a “hands-off” approach to regulating FinTech.
At the same time, the central bank expects these companies to follow rules on customer verification and data protection, the RBI executive director said. P.Vasudevan said Friday, February 16, Bloomberg reported Friday.
According to the report, “no tougher measures are planned regarding FinTech,” Vasudevan said. Vasudevan is head of law enforcement at RBI, the report said.
Other RBI officials also said the regulator wants the FinTech sector to thrive, the report said.
This news follows reports of measures taken by the RBI in recent weeks.
On Wednesday, February 14, it was reported that Visa and Mastercard had suspended their intermediation operations. commercial card payments in India after the RBI asked them to do so.
“Visa received communication from the RBI on February 8, in what appears to be an industry-wide request for information on the role of business payment solution providers (BPSPs) in commercial and business payments” , a Visa spokesperson told Reuters.
The Economic Times (ET) reported that the RBI’s decision may have been driven by the regulator’s efforts to stop a flow of money to traders who have not been subjected to know-your-customer processes ( KYC). The bank accounts of these merchants may have been subjected to KYC processes, but the merchants themselves are not authorized to accept card payments as merchants, ET’s report said.
In another move, the RBI issued an order on January 31 directing Paytm Payments Bank to cease operations. THE banking regulator said an audit found compliance issues related to the bank, which processes transactions for Indian FinTech Paytm.
The RBI had ordered the bank in 2022 to stop accepting new clients pending an audit. In a statement issued on January 31, the regulator said the audit “revealed ongoing non-compliances and ongoing supervisory concerns within the bank, warranting additional supervisory measures.”
On February 4, it was reported that the RBI had found thousands of Paytm Payments bank accounts created without proper identification and had passed this information to authorities in the country. financial crime-combat agency.
A spokesperson for Paytm Payments Bank told Reuters at the time that neither it nor Paytm had ever been investigated by the Enforcement Directorate.
