How RBI, SEBI Chiefs Became Market Darlings

Sanjay Malhotra and Tuhin Kanta Pandey are viewed as softer incarnates than their predecessors

- Neha Joshi & Shayan Ghosh

The hall at Jio World Convention Centre in Mumbai was packed to the brim on the evening of 20 September 2022. It was the third edition of the Global Fintech Fest, an event that brought together hundreds of financial technology companies (fintechs), banks, non-bank financiers, and regulators.

Shaktikanta Das, the former Reserve Bank of India (RBI) governor, took the stage to address the gathering. Just weeks ago, the banking regulator had released tighter norms for digital lenders following complaints that lending apps were charging usurious interest rates, pursuing aggressive recovery practices, and committing fraud and breach of data privacy.

The air at the event was heavy with anticipation—would Das bring some joy to distressed lenders who were now mandated to disclose the all-inclusive cost of digital loans to borrowers and barred from automatically increasing credit limits without the borrower's consent?

They heard Das nervously as he struck a cautionary tone. The fintech road ahead will witness ever-growing traffic, he said. And therefore, it is imperative that "every player on this road follows the traffic rules for his/her own safety and the safety of others".

New-age lenders went home disappointed that day. And there was no let-up in traffic rules in the following days, weeks, and months.

Over the course of his tenure as RBI's chief, Das continued to crack the whip on erring companies. In 2024, RBI strengthened regulations around peer-to-peer lending and fined a couple of platforms for violations. That year, the regulator had also imposed stringent curbs on Paytm Payments Bank for "persistent non-compliances"—deposits and top-ups at the bank were barred and the company's FASTag and wallet became inoperable.

That seemed like an overreach to fintechs, already battling a funding winter. In fact, following the Paytm episode, a clutch of founders wrote to finance minister Nirmala Sitharaman expressing their unease.