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India’s banking regulator has taken drastic action against the country’s fintech sector, weeks after surprising investors by abruptly halting most operations of Paytm Payments Bank, founded by wealthy billionaire Vijay Shekhar Sharma. He said he had no intention of getting drunk.

“There cannot be harsher measures against fintech,” P. Vasudevan, executive director of the Reserve Bank of India, said on Friday. Vasudevan said the central bank was happy to see self-regulation of the sector but expected companies to follow the rules on data privacy. He added that the regulator wants a hands-off approach to fintech regulation.

Vasudevan’s comments, a key official closely involved in the development of India’s payments space over the past decade, are comforting even as regulators step up action against payments companies that violate customer verification and data protection norms. central bank.

Paytm, the Indian fintech giant backed by SoftBank Group Corp., has been in the crosshairs of regulators for some time, with multiple warnings over the past two years about suspicious transactions between the popular payments app and the little-known banking sector. . The RBI is considering revoking Paytm Payments Bank Ltd.’s license as early as next month, Bloomberg reported earlier this month.

In addition to taking action against Paytm Bank, the regulator also created anxiety among payment service providers this week after asking large card networks to suspend certain operations. The central bank argued that card networks were not permitted to provide payment systems without authorization.

RBI officials, including Governor Shaktikanta Das, said earlier this month that the regulator supports the fintech industry and wants to see companies grow.

© 2024 Bloomberg LP

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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