18 February,2024 02:22 PM IST | Delhi | mid-day online correspondent
Rajeev Chandrasekhar, Union minister of state for electronics and technology. File pic
Union Minister Rajeev Chandrasekhar has emphasised the need for regulatory compliance for fintech companies following the Reserve Bank of India's (RBI) recent action against Paytm Payments Bank.
According to Chandrasekhar, Minister of State for Electronics and Information Technology, regulatory compliance is not optional but necessary for all businesses, regardless of size or origin. He told PTI that entrepreneurs must strictly adhere to the law.
The RBI's decision to prohibit Paytm Payments Bank from receiving new deposits beginning March 15 has highlighted the need for regulatory compliance among fintech entrepreneurs. Chandrasekhar underlined that this move has no negative effects on the overall fintech industry, but rather acts as a warning for businesses to follow regulations, reported PTI.
"And this notion that RBI... the regulator's action against Paytm Payments Bank has rattled fintech is... I don't think that's a correct characterisation. I think it has drawn the attention of fintech entrepreneurs, to the fact that you also have to know how to comply with the law. Regulatory compliance is not an optional thing for any country in the world, certainly not in India, and it is something that they (entrepreneurs) should pay more attention to," he told PTI.
According to the report, he emphasised how entrepreneurs might get so focused on growing their enterprises that they disregard regulatory constraints. Chandrasekhar, a former entrepreneur, blamed the omission on a "genetic flaw" typical in businesses.
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"So I will put this down to that type of an error where a hard-charging entrepreneur, believes in himself, is building a company successfully (but) fails to realise that there are some regulatory do's and don'ts and there can never be a situation whether it's a social media company, or a fintech company, where somebody is not compliant with the law and expects to get away with it," the minister said.
Regarding the Paytm Payments Bank issue, Chandrasekhar stressed the importance of understanding and complying with rules set by regulators like the RBI. He emphasized that regardless of the nature or size of a digital economy firm, adherence to the law is imperative, the report added.
"I have said all along and this is a position of the government of India, regardless of where you come into the digital economy from India or abroad, whether you have a big or a small firm in the digital economy, FinTech or AI, the rules in the law of the land has to be complied with," he told PTI.
"In the FinTech space, the regulator who lays down the rules is the RBI. So, you have to listen to the RBI and you have to comply with the RBI," the minister said.
