RBI’s warning to fintechs: How do international compliance standards impact fintechs in India? Know about GDPR or AML directives

financialexpress.com:

The BFSI sector has grown by leaps and bounds, transitioning India from a primarily cash-driven economy to one that is now highly digitised. Fintech, today, has entered the mainstream, focusing on increasing profitability and curtailing risk. The fintech ecosystem has witnessed tremendous technological advancements and is projected to grow sixfold from $245 billion to $1.5 trillion by 2030. The Asia-Pacific region is expected to outpace the US and climb up the ranks to become the world’s leading fintech market by 2030. 

With such growth projections and the recent crackdown from the RBI on Paytm Payments Bank, fintech companies have become more watchful about compliance measures. Earlier, Union Minister Rajeev Chandrasekhar also stated that the RBI’s regulatory action has drawn the attention of fintech firms to the importance of complying with laws. In line with this, Rishi Agrawal, CEO and Co-Founder, Teamlease RegTech, talked to FinancialExpress.com on international compliance standards such as GDPR or AML (Anti-Money Laundering) directives, and how they impact fintech operations in India.

“Fintech companies in India are subject to all domestic laws and regulations that are in force. The country has a robust framework of anti-money laundering regulations derived from the Financial Action Task Force Guidelines. The Prevention of Money Laundering Act, 2002 was enacted to protect the country from money laundering risks and identify and prevent other illicit financial activities. The Financial Intelligence Unit – India (FIU-IND) and RBI are central figures in the fight against financial crimes, with fintechs obligated under the AML directives required to report to them,” he said. 

“Businesses dealing with customers and user