Finance Minister Nirmala Sitharaman has called upon the Reserve Bank of India (RBI) to conduct monthly virtual meetings to address the concerns and queries of start-ups and fintech companies. The move aims to foster a collaborative environment and facilitate a smoother exchange of ideas between the banking regulator, the Ministry of Finance, and the Department for Promotion of Industry and Internal Trade (DPIIT).
Background on the Meeting:
Sitharaman chaired a meeting in New Delhi on Monday, bringing together India’s start-up and fintech entities. The gathering was organized to encourage the open exchange of ideas, enabling the growth and scalability of operations to enhance global competitiveness within the fintech sector.
India currently boasts around 10,244 fintech entities, with the number of start-ups surging from just over 300 in 2016 to over 1.17 lakh in 2023, generating more than 12.4 lakh jobs. During the meeting, the Finance Minister emphasized the need for the simplification and digitization of KYC processes across all fintech segments. Stakeholders also suggested the rationalization of lending or funding costs for critical areas, including priority sectors.
Key Discussions and Initiatives:
Sitharaman acknowledged the rapid growth of India’s start-up and fintech sector, welcoming suggestions from industry leaders to enhance the Ease of Doing Business and Ease of Living for consumers. The meeting underscored the importance of innovative solutions by fintech companies within regulatory compliance, highlighting the role of enablers such as Aadhaar, UPI, and API Setu.
The DPIIT reported the addition of new patent examiners to expedite the turnaround time for patent applications. Cybercrime concerns will be addressed in the upcoming Digital India Act. India’s fintech ecosystem, the third-largest globally, is growing at a remarkable 14% Compound Annual Growth Rate (CAGR). The meeting participants lauded the efficacy of GIFT City and the International Financial Services Centres Authority (IFSCA), recognizing the opportunities they create for startups and fintechs.
Conclusion:
The collaborative efforts between the Finance Ministry, RBI, and DPIIT reflect the government’s commitment to nurturing the thriving fintech ecosystem. The decision to hold regular virtual meetings signifies a proactive approach to addressing industry challenges and fostering an environment conducive to innovation and growth. As India’s fintech sector continues to evolve, these initiatives are poised to contribute significantly to the sector’s sustained success and global competitiveness.
