RBI to regulate new rules for fintech firms

The Reserve Bank of India (RBI) is likely to announce new regulations for fintech companies regarding various aspects including credit operations and KYC norms, as it was receiving complaints related to some fintechs charging usurious interest rates and other issues.

The new fintech regulations will likely cover aspects of data sharing, privacy, extent of outsourcing relationships, compliance with KYC, anti-money laundering (AML) norms, and formal legitimacy of products like buy now, pay later (BNPL).

In its Financial Stability Report (FSR), the RBI said the global fintech market was valued at $111 billion in 2020, and is projected to reach $698 billion by 2030. The Indian fintech industry, among the fastest growing in the world, was valued at $50-60 billion in 2020 and is projected to reach $150 billion by 2025.

Vikram Babbar, partner, forensic and integrity services, EY, said, “There are discussions happening on the role of fintechs and how to regulate them. That will soon come out as a notification or a regulation. I think this year you will see some RBI requirements on how fintechs will be regulated.”