Running a fintech business in India involves dealing with a lot of rules and regulations. Before starting operations, companies need to get various licenses and approvals from the government. There are different stages to get these licenses, like the ‘setting up’ stage, ‘pre-commissioning’ stage, ‘post-commissioning’ stage, and the ‘post-production’ stage.
Rishi Agrawal, the CEO of Teamlease RegTech, explained that fintech companies in India must obtain registrations and certificates under different acts and rules, like the Contract Labour (Regulation and Abolition) Act, 1970, and the Employees State Insurance Act, 1948.
If a fintech deals with deposits and lending, they need a banking or non-banking license from the RBI. Depending on their financial services, they may also need approvals from RBI, SEBI, or IRDAI.
For publicly traded fintech companies, disclosing financial information and risks is crucial. The Securities and Exchange Board of India (SEBI) has regulations, like the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to ensure that these companies inform investors and shareholders about important events and information. They must disclose material events within 24 hours and decisions from board meetings within 30 minutes.
To stay updated with all the rules and changes, fintech companies should regularly check for updates from regulatory authorities like RBI and the Ministry of Corporate Affairs.
This is important because there are many different regulations, not only in the financial sector but also in labor, environment, finance, and taxation. Keeping up with these changes can be challenging, as there are over 1,500 acts and rules and more than 69,000 compliances that businesses in India need to follow. Additionally, they have to monitor over 2,200 government websites for regulatory updates.