Finance Minister Sitharaman tells RBI to plan monthly meetings with startups, fintech firms

Fintech, startup concerns: Finance Minister Nirmala Sitharaman on Monday asked the Reserve Bank of India (RBI) to pay heed to concerns of startup and fintech firms by exploring to hold monthly meetings with their representatives, officials said.

Sitharaman put forth the suggestion at a meeting with startup and fintech ecosystem entities that was attended by top executives of as many as 50 firms, including Razorpay, CRED, and venture capital firm PeakXV.

Fintech companies and various Associations such as Fintech Association for Consumer Empowerment (FACE), Digital Lenders’ Association of India (DLAI), Payment Council of India (PCI), and Fintech Convergence Council (FCC) were also present in the meeting. 

"The Finance Minister has suggested that RBI may hold a meeting on a fixed day every month via virtual mode with the startup and fintech firms to address their concerns and issues," one of the officials privy to the matter informed. However, the official said that Sitharaman asking for a monthly meeting has does not arise out of Paytm-related anxiety. The concerns shown by the startup founders and fintech entities during the meeting were not triggered by Paytm.

In terms of government representation, the meeting was attended by Financial Services Secretary Vivek Joshi, DPIIT Secretary Rajesh Kumar Singh and MeitY (Ministry of Electronics and Information Technology) Secretary S Krishnan. RBI Deputy Governor T Rabi Sankar was also present. SBI Chairman Dinesh Khara and NPCI officials too were present. The meeting comes at a time when RBI's action against Paytm Payments Bank has put the spotlight on regulatory compliance in the fintech industry.

The official said that cybersecurity-related concerns were raised by startups. Some startups suggested that the government should take proactive steps to deal with such frauds. The startups and fintech entities appreciated the processes and efficacy of GIFT City, the official added.

One of the suggestions that came up in the meeting was to conduct a  day-long workshop with Law Enforcement Agencies (LEAs) wherein fintech ecosystem partners can voice their issues/concerns. 

Among the startup ecosystem which has grown from 300 companies in 2016 to 1.17 lakh in 2023, India has approximately 10,244 Fintech entities. This makes the nation the third largest in the world in terms of the fintech sector. 

On January 31, RBI barred Paytm Payments Bank Ltd (PPBL) from accepting any fresh deposits or top-ups from customers after February 29 for not complying with regulations. The deadline was later extended till March 15.

Last week, RBI advised the National Payments Corporation of India (NPCI) to examine the possibility of migrating the users from PPBL to four to five other banks. PPBL has 30 crore wallets and 3 crore bank customers. 

(With agency inputs)