Fintech Players Need To Talk To Regulators: TV Mohandas Pai

Fintech Players Need To Talk, Educate & Interact With Regulators: TV Mohandas Pai

SUMMARY

During the Fintech Summit 2022, Pai talked about the opportunities presented by the fintech segment and the use of AI-ML and deep learning

Talking about the regulatory struggle within the segment, Aarin Capital’s chairman and industry veteran TV Mohandas Pai suggested a dialogue between the players

It is noteworthy that certain fintech subsectors such as payments, lending tech and blockchain are facing the heat of the regulatory bodies who are ‘behind the curve’

Speaking at the first session, first day of the Inc42 Fintech Summit, Aarin Capital’s chairman TV Mohandas Pai opined that fintech stakeholders need to have a dialogue with the regulators.

He said, “It is important for fintech players to talk to the regulators, educate them, interact with them and create a regulatory system because they are not going to go away. Regulators only want to protect depositors and borrowers.”

The comment comes on the back of his statement that capital, regulation and the people are holding back India’s fintech segment from realising its true potential and becoming much bigger than what it is today.

Despite the industry set to become a $1.3 Tn market by 2025, Pai envisions a much bigger industry only when regulators are ahead in the curve and not ‘behind the curve’.

He exemplified the ideology with the example of broking platform Nitin Kamath’s Zerodha which has “turned the whole broking industry upside down” while CRED has “turned the whole credit card industry upside down.”

As the internet economy matures, companies are trying to break into the payments market with products such as BNPL.

And Pai is not alone in talking about the regulatory hurdles within the fintech sector. NITI Aayog CEO Amitabh Kant has previously also mentioned that despite being the shining star among Indian internet sectors, regulatory hurdles have time and again come in the way of the development of the fintech sector.

In only the first six months of 2022, RBI has come up with the credit card issuance and PPI mandates along with the payments vision on top of the tokenisation infrastructure development.

To this, Pai, during the keynote session at Inc42’s Fintech Summit 2022 stated that regulators have consumers’ interests in mind. “They only want to ensure there is no misselling of any financial product. Fintech firms cannot run the government”

But, the major of the conversation that happens between stakeholders and the regulatory bodies is regarding deadline extensions of policies. Independent bodies including the Payments Council of India (PCI), the Merchants Payment Association of India (MPAI) and the Internet and Mobile Association of India (IAMAI) have only sought clarity from the regulators.

Thus, Pai’s idea for fintech stakeholders to proactively commence a dialogue with regulators is a plausible and noteworthy one.