RBI warns fintechs against exploiting regulatory gaps, urges responsible innovation

At the Global Fintech Fest 2026, RBI Governor Sanjay Malhotra cautioned fintech companies against taking advantage of ambiguities in regulatory classifications. He warned that leveraging such gaps to boost business volumes is a short‑term tactic that could jeopardise long‑term credibility.

"Some firms rush to expand and only later look for regulatory clarity; this is not a viable model," Malhotra said. He stressed that as transaction volumes, loan disbursements and user bases increase, the duty to protect consumers grows accordingly.

The governor called for a proactive approach to compliance, urging fintechs to adopt transparent, rule‑based frameworks from the beginning. Operational flexibility, business continuity and robust cyber‑security measures must be treated as essential responsibilities, not optional expenses.

Malhotra also highlighted the importance of data stewardship. Financial information should be treated as a trust asset, used only for the specific purposes for which customers have given consent. The account aggregator model, he noted, is built on this very principle.

Concluding his address, Malhotra praised India’s fintech ecosystem for ranking third globally, attracting $2.4 billion in investment last year and nurturing 30 fintech unicorns. Yet he reminded the audience that true success is measured not merely by numbers but by how deeply digital finance has become part of everyday life for millions of Indians.