If you are reading this newsletter and work in fintech, you were likely at the Global Fintech Fest held in Mumbai on Wednesday - today, at the Jio World Centre BKC. The fintech hype I saw there first-hand was real. Fintech founders were celebrities. I was even asked to click a picture of a person with the founder of a unicorn.
If that wasn’t flattery enough, the statements of Reserve Bank of India’s (RBI) Governor Shaktikanta Das the day before should have sent fintechs giddy with excitement.
Das, who was launching the UPI-Rupay credit card facility, called fintechs India’s force multiplier. India’s Chief Economic Advisor V Anantha Nageswaran topped that, saying the market size of India’s fintechs is expected to reach US$1 trillion by 2030.
But ask fintechs in private—are you excited?—and the gloom tumbles out.
“This is atmospherics,” said one executive.
“We are experiencing Stockholm Syndrome,” said a fintech founder.
Another invoked Schrödinger: “We are alive and dead at the same time.”
All of this was off-the-record.
The reason for these less-than-happy sentiments is the back-to-back regulatory blows they’ve received recently—from the RBI’s digital lending guidelines to the ban on pre-paid instruments backed by credit lines.
This is something fintechs wouldn’t dare say to their banking partners, let alone the regulator, even though the RBI now has a fintech department. The regulator says play within the guardrails. But in some cases, fintechs feel it also removes the rails altogether, leaving nothing to guard. Like in the case of prepaid instruments backed by credit lines.
What India’s fintechs really need to do to get to that eye watering US$1-trillion market size is have an honest conversation with the regulator. For starters.
Maybe that’s where disruption really starts.
