BENGALURU: Over 40 fintech companies including Razorpay and PhonePe in a meeting with finance minister Nirmala Sitharaman on Monday initiated various discussions including simplification and digitisation of KYC and lending norms reform, among others.
They said this initiative enables free exchange of ideas and this will facilitate growth in the sector. Talking about measures that fintech firms must take to ensure compliance with consumer protection laws and guidelines issued by the RBI, Rishi Agrawal, CEO and co-founder, Teamlease RegTech, said companies must remain apprised of the regulatory requirements to stay on top of their compliance obligations.
“They must stay on top of the Master Circulars and Master Directions issued by the RBI. Analysing the impact of RBI’s directions will allow businesses to stay on top of their regulatory obligations. They must digitise internal processes to monitor deposits, lending, recovery and other business operations. These IT systems must be encoded to set employee conduct limits. When employees deviate from expected behaviour, these systems must raise flags,” he said.
He added that risk flagging prevents unsafe and illegal transactions from being permitted without senior management clearance. Internal systems need stronger, risk-based lending policies to deter rule-breaking staff. Any fintech accepting deposits and lending is required to acquire the appropriate banking or non-banking licence from the RBI.
Though the meeting with the FM didn’t discuss any specific case like Paytm Payments Bank, the focus is on compliance. “Companies must conduct compliance applicability assessments to determine the extent of regulations applicable to their business. They must keep track of circulars, directions, advisories, notices, orders issued by regulators like RBI, the Ministry of Corporate Affairs to stay updated with regulatory changes,” added Agrawal.
Bhuvan Rustagi, co-founder and COO, Per Annum and Lendbox, said leveraging advanced technology for real-time document verification enhances the efficiency and accuracy of KYC processes.