Paytm crisis: FM Nirmala Sitharaman asks RBI, fintechs to hold monthly meetings in wake of Paytm crisis
Finance Minister Nirmala Sitharaman has asked regulators to hold monthly meetings with startups and fintech firms to address their issues and concerns while emphasising strict regulatory compliance.
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Sitharaman met startup and fintech stakeholders on Monday along with senior government officials.
The much-anticipated meeting comes amid the Reserve Bank of India’s actions against Paytm Payments Bank (PPBL).
The finance ministry put out six action points after the meeting which was also attended by RBI deputy governor T Rabi Sankar, State Bank of India chairman Dinesh Kumar Khara and officials from the National Payment Corporation of India (NPCI), among others.
These action points include simplification and digitisation of KYC (Know Your Customer) across all fintech segments and interaction with law enforcement agencies to allow fintech firms to voice their issues or concerns.
Cybercrime issues will be suitably addressed in the new Digital India Act, the finance ministry said in a statement after the meeting.
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“RBI, DPIIT (Department for Promotion of Industry and Internal Trade) and MoF (Ministry of Finance) to look at the change of ownership holding/control of listed fintech companies to enable them to be in sync with regulatory compliance,” according to the statement.Last week, ET reported that Sitharaman will meet heads of fintech firms in the backdrop of RBI’s action against PPBL and reassure the industry that the health of the startup and fintech ecosystem remains a key priority for the government.
Meanwhile, Vijay Shekhar Sharma resigned on Monday as part-time chairman and board member of PPBL. PPBL is an associate entity of One 97 Communications Ltd, the parent company which owns and operates the Paytm brand.
“Sitharaman exhorted the regulators, including RBI, that they may hold meetings via virtual mode once a month to discuss any questions, queries or concerns of the startups and fintech companies,” the ministry said in the statement.
No Paytm-related anxiety or concerns were shown by the startup founders or fintech entities during the meeting, an official said.
On January 31, the RBI asked PPBL to stop accepting deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards, after February 29. The deadline was later extended till March 15.
A group of founders subsequently wrote a letter to the finance minister and RBI governor Shaktikanta Das, requesting that the regulator reassess “the proportionality of restrictions, considering their potential impact on Paytm Payments Bank, the fintech ecosystem, and the broader economy.”
Sitharaman noted that India’s fintech ecosystem is the third largest in the world and growing at 14% CAGR and that the central bank recently floated a draft framework for recognition of the Self-Regulatory Organisation (SRO) for the sector for stakeholder consultation, the statement said.
“The number of startups in India have grown significantly from just over 300 in 2016 to over 1.17 lakh in 2023 as recognised by DPIIT, generating more than 12.4 lakh jobs, and 47% of the Start-ups have at least one women director,” the statement noted.
“DFS will conduct a day-long workshop with Law Enforcement Agencies (LEAs) wherein fintech ecosystem partners can voice their issues or concerns.”
The discussions were a two-way dialogue where the fintech industry put forth their concerns around operational aspects such as KYC, consultation around the digital personal data protection bill as well as goods and services tax (GST), said an industry executive.
“One major topic that was raised by the industry was about common KYC for fintechs. The ministry was receptive to the suggestions made by the participants and asked the industry to send a letter for the government to take up,” the executive added.
Finance Minister Nirmala Sitharaman has asked regulators to hold monthly meetings with startups and fintech firms to address their issues and concerns while emphasising strict regulatory compliance.
![]()
Sitharaman met startup and fintech stakeholders on Monday along with senior government officials.
The much-anticipated meeting comes amid the Reserve Bank of India’s actions against Paytm Payments Bank (PPBL).
The finance ministry put out six action points after the meeting which was also attended by RBI deputy governor T Rabi Sankar, State Bank of India chairman Dinesh Kumar Khara and officials from the National Payment Corporation of India (NPCI), among others.
These action points include simplification and digitisation of KYC (Know Your Customer) across all fintech segments and interaction with law enforcement agencies to allow fintech firms to voice their issues or concerns.
Cybercrime issues will be suitably addressed in the new Digital India Act, the finance ministry said in a statement after the meeting.
Discover the stories of your interest
“RBI, DPIIT (Department for Promotion of Industry and Internal Trade) and MoF (Ministry of Finance) to look at the change of ownership holding/control of listed fintech companies to enable them to be in sync with regulatory compliance,” according to the statement.Last week, ET reported that Sitharaman will meet heads of fintech firms in the backdrop of RBI’s action against PPBL and reassure the industry that the health of the startup and fintech ecosystem remains a key priority for the government.
Meanwhile, Vijay Shekhar Sharma resigned on Monday as part-time chairman and board member of PPBL. PPBL is an associate entity of One 97 Communications Ltd, the parent company which owns and operates the Paytm brand.
“Sitharaman exhorted the regulators, including RBI, that they may hold meetings via virtual mode once a month to discuss any questions, queries or concerns of the startups and fintech companies,” the ministry said in the statement.
No Paytm-related anxiety or concerns were shown by the startup founders or fintech entities during the meeting, an official said.
On January 31, the RBI asked PPBL to stop accepting deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards, after February 29. The deadline was later extended till March 15.
A group of founders subsequently wrote a letter to the finance minister and RBI governor Shaktikanta Das, requesting that the regulator reassess “the proportionality of restrictions, considering their potential impact on Paytm Payments Bank, the fintech ecosystem, and the broader economy.”
Sitharaman noted that India’s fintech ecosystem is the third largest in the world and growing at 14% CAGR and that the central bank recently floated a draft framework for recognition of the Self-Regulatory Organisation (SRO) for the sector for stakeholder consultation, the statement said.
“The number of startups in India have grown significantly from just over 300 in 2016 to over 1.17 lakh in 2023 as recognised by DPIIT, generating more than 12.4 lakh jobs, and 47% of the Start-ups have at least one women director,” the statement noted.
“DFS will conduct a day-long workshop with Law Enforcement Agencies (LEAs) wherein fintech ecosystem partners can voice their issues or concerns.”
The discussions were a two-way dialogue where the fintech industry put forth their concerns around operational aspects such as KYC, consultation around the digital personal data protection bill as well as goods and services tax (GST), said an industry executive.
“One major topic that was raised by the industry was about common KYC for fintechs. The ministry was receptive to the suggestions made by the participants and asked the industry to send a letter for the government to take up,” the executive added.
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