Finance Minister Sitharaman to meet more than 20 fintech companies next week on KYC compliance

Finance Minister Sitharaman to meet more than 20 fintech companies next week on KYC compliance

According to a government official, Paytm is unlikely to be a part of the meeting where the Finance Minister is likely to emphasize the importance of adhering to KYC norms and compliance.

The Finance Minister is likely to stress on the importance of adhering to KYC norms and compliance

Finance Minister Nirmala Sitharaman is likely to meet about 20 fintech firms, excluding Paytm, along with senior Reserve Bank of India (RBI) officials next week to push for KYC compliance, a senior government official said.

“The Finance Minister is meeting fintech companies next week, possibly on February 26 or 27. Senior officials of RBI will also participate in it. At least 20 fintech firms related to lending, payment processing and mutual funds are likely to be called for the meeting,” the official told Moneycontrol.

"However, Paytm is unlikely to be called to the meeting," he said.

The meeting is coming closer after the RBI asked Paytm Payments Bank account holders, both customers and merchants, to transfer their assets and look for alternative banks by March 15 due to major irregularities in KYC compliance.

“The meeting is not on Paytm Payments Bank. Without taking any side, the FM is likely to stress the importance of adhering to KYC norms and compliance. "Sitharaman will also listen to the issues of fintech companies and urge them to comply," the official said.

Since RBI officials will be present in the meeting, they will also talk about innovations from fintechs and their regulation issues. The finance minister will play the role of mediator between the RBI and fintech companies, the official said.

The meeting is being seen as a move by the government to ensure that more fintechs do not come under the central bank's scrutiny for KYC non-compliance.

RBI had imposed business restrictions on Paytm Payments Bank on January 31. The central bank said a comprehensive system audit report and subsequent compliance verification report by external auditors revealed persistent non-compliance and continuing material supervisory concerns at the bank, requiring further supervisory action.

RBI has barred Paytm Payments Bank Limited (PPBL) from accepting deposits or top-ups to any customer accounts, prepaid instruments, wallets and FASTags after March 15. RBI Governor Shaktikanta Das has said that there is limited scope to reconsider the measures taken. Against Paytm Payments Bank. He said the central bank takes action against regulated entities only after a thorough assessment.