How safe is it to work in a fintech when RBI/govt goes on banning spree
https://m.economictimes.com/tech/technology/non-chinese-lending-apps-including-payus-lazypay-kissht-blocked-on-meitys-order/articleshow/97656552.cms
Buz
Stealth
2 years ago
High likelihood of drastically changing biz model or even shutting shop. Everyone will eventually come under the regulated ambit and RBI is not happy to hand licences to everyone. In any case regulated business takes out the only differentiator in most cases - extreme ease of transacting/no kyc/no CIC reporting. Flimsy things to build businesses on.
ConcurrentThinker
Stealth
2 years ago
Exactly. If everyone looks the same and only differentiator is the UI/UX then that's a bad way or idea to base a business on. Doesn't bade well for the startups in the business.
Can't do much when RBI and SEBI be going around with a hammer. Not to mention fintechs under a lot of scrutiny these days.
The primary reason for RBI to gun fintechs is due to lack of compliance in these fintech. No internal audits, no supervision - everything is business driven. Fintechs who have partnered with strong Indian banks have flourished. Any bank or fintech working within grey area of RBI policies are bound to get snapped.
Buz
Stealth
2 years ago
No fintech is safe until regulated and the minute they get big they will be regulated. So create a biz model assuming the constraints of regulation which is a hell of a lot tougher. Only a patient long term player can play the game now. Days of hypergrowth are over.
majboormajdoor
Stealth
2 years ago
Depends on the areas:
1. Money taking areas: neobanks, wealth, MF, stocktrading are going to be tightly regulated, audited and have been even before. Wallets, payment banks are awaiting a clarity on what their future will turn out
majboormajdoor
Stealth
2 years ago
2. Lending/BNPL/CC: RBI can only regulate banks, NBFC's and CC issuers. Unless it becomes a KYC, privacy, Bureau or data security (Chinese) issue, RBI won't do anything. If collections become violent, then it's a political/criminal issue
majboormajdoor
Stealth
2 years ago
Most lending apps borrow money from banks/NBFC's to lend forward, this is via securitization or Co-lending or NCDs. This is where RBI can stop the source of funding
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