RBI not planning stringent rules to curb fintech sector after crackdown on Paytm, official says

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India's banking regulator has no intention of taking tough action on the country's fintech sector, weeks after it abruptly suspended most of the operations of Paytm Payments Bank, founded by high-flying billionaire Vijay Shekhar Sharma, a senior official said. Investors were surprised.

“No stringent measures are being taken on fintech,” P. Vasudevan, executive director in charge of enforcement at the Reserve Bank of India, said on Friday. Vasudevan said the central bank would be happy to see self-regulation for the sector, but expected companies to follow rules on data privacy. He said the supervisors want to take a pragmatic approach to fintech regulation.

The comments from Vasudevan, a key executive closely involved in the growth of the payments sector in India over the past decade, come as comfort, even as the regulator has stepped up its action against payments companies violating customer verification and data security norms. Central bank.

SoftBank Group Corp-backed Paytm, India's fintech giant, has been in the regulator's crosshairs for some time now, with multiple warnings over the past two years about suspicious transactions between its popular payments app and its lesser-known banking arm. are given. , Bloomberg reported earlier this month that the RBI is considering terminating the license of Paytm Payments Bank Ltd. as early as next month.

Apart from taking steps against Paytm Bank, the regulator this week created concerns among payment service providers when it asked a large card network to halt certain operations. The central bank argued that card networks were not allowed to offer payment systems without authorization.

RBI officials, including Governor Shaktikanta Das, had said earlier this month that the regulator supports the fintech industry and wants companies to move forward.

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