The Indian Express | Aadhaar, PAN, Paytm, KYC — how fintech regulation is hurting the consumer

In the evolving landscape of fintech or financial technology, India stands at the crossroads of innovation and regulation. What began as a quest for stability and oversight has devolved into a dystopian odyssey, where good intentions pave the road to chaos, and unintended consequences lurk around every corner.

Our story today commences with a modest trigger — the cautious instructions of the RBI to Kotak Bank, halting new digital customer onboarding and suspending credit card issuances. The regulatory zeal, ostensibly aimed at preempting potential outages, lacks a tangible basis for outage events. It’s reminiscent of the regulatory crackdowns of the past, where rigid checks were imposed without a clear understanding of the underlying issues, like the one on HDFC a few years ago or on Paytm recently. This knee-jerk reaction to largely hypothetical scenarios reflects a systemic failure to distinguish between proactive risk management and reactive overreach.

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