As per the statement of DLF Financial Services Secretary Vivek Joshi, Fintechs are very good with technology & in innovating, they must be mindful of their regulatory responsibilities as they grow from small firms to larger ones. Business growth & compliance with norms must go hand in hand for start-ups.

Also he added, "The start-up ecosystem has to understand that as they grow, they will have to keep up with regulations and compliance. For example, if you have a small home-run, import-export business, you don't need a licence. But you can't say that you won't take a licence from DGFT (Directorate General of Foreign Trade) or not pay a duty after growing beyond a certain size”.

On the Paytm crisis, Joshi's commented "One of India's premier start-ups in the financial sector space, Paytm, has run into trouble with its regulator, the Reserve Bank of India (RBI). The Indian central bank directed Paytm Payments Bank to stop accepting fresh deposits and making credit transactions after February 29. The payments banks has also been barred from accepting top-ups in any customer accounts, including prepaid instruments, wallets, FASTags & NCMC cards. The RBI has said it is taking action against the bank after the Comprehensive System Audit and compliance validation report of the external auditors revealed persistent non-compliance & continued material supervisory concerns in the bank, warranting further supervisory action".

"Fintechs are highly-powered in technology & innovations. They are young entrepreneurs; they have an idea, and get backing from angel investors, says Joshi.

Further Joshi added, "But they are small (to begin with). As they grow, they have to start interacting with the government and regulators. Suppose I am an MFI (microfinance institution) and I start an NGO and give loans to people in villages. I don't need a license for that. But as soon as I become Rs 100 crore in terms of size, then I will have to go to the RBI. Then I can't say 'I did great work until now and will continue to do so'. I'll have to follow the law of the land.

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