RBI bolsters fintech scrutiny with more inspections

The RBI's moves come as financial regulators in other markets, including China, crack down on rule violations

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From hiring analysts, to scrutinising customer data, to holding frequent meetings with executives, India's financial regulator is bolstering oversight of fintech firms in a signal of an end to years of light-handed regulation of a key business sector.

Those steps from the Reserve Bank of India (RBI) come after regular inspections over the past year found a number of fintech firms have been lax in following, for example, customer due diligence, five persons with knowledge of the matter said.

Fintech firms and their investors were given a foretaste of that stricter approach last month when the central bank ordered sector giant Paytm to wind down its banking unit due to, what it termed, persistent non-compliance with regulations.

That directive, which stirred disquiet in the sector, was followed by a separate order this month to Visa asking it to stop business-to-business card payments through third-party fintech firms.