Amazon, Facebook, Google Faces PIL Over Fintech Regulation in India

The PIL seeks a detailed legal framework for regulating operations of fintech companies in India.

Amazon, Facebook, Google Faces PIL Over Fintech Regulation in India

According to the petition, techfin entities are technology, telecommunications, or e-commerce companies

Highlights
  • Bench of Chief Justice D N Patel and Justice Prateek Jalan issued notice
  • The notice was issued RBI, NPCI, IRDAI, SEBI among others
  • The plea was filed by Resmi P Bhaskaran
Advertisement

The Delhi High Court Wednesday sought response of the Centre, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDAI), and National Payments Corporation of India (NPCI) on a PIL seeking a detailed legal framework for regulating operations of fintech companies such as Amazon, Facebook, and Google, in India's financial sector space.

According to the petition filed by an economist, ‘techfin' entities are technology, telecommunications, or e-commerce companies that have entered the financial sector to provide financial services and need to be regulated.

A bench of Chief Justice D N Patel and Justice Prateek Jalan issued notice to the ministries of finance and law as also RBI, NPCI, IRDAI, SEBI, and the Pension Fund Regulatory and Development Authority (PFRDA) seeking their stand on the plea by Resmi P Bhaskaran.

Bhaskaran, in her plea filed through advocate Deepak Prakash, has alleged that the "lackadaisical approach" of Indian financial regulators permits unregulated operation of techfin firms and claims that this could adversely affect the financial stability of the country.

The petition has claimed that unregulated operation of techfin entities in the financial sector can lead to financial crisis and leakage of personal data.

It has claimed that these companies have a "deep well of data and an established international network" which gives them an advantage in the financial sector.

However, they are "neither subject to client/ customer/investor protection rules nor regulatory measures that ensure functioning of financial markets and prevent build-up of systemic risk", the petition has contended.

It has further said that due to "the absence of dedicated regulations", the techfins have entered the financial domain by partnering with existing entities and compete with regulated financial institutions without having to comply with the same requirements.

These entities initially begin relationships with customers in a non-financial service setting, collect massive amounts of data from such relationships and then use it to serve as a conduit for access to financial services, it said.

Therefore, by functioning as a conduit between customers and financial institutions, such entities are not subject to the regulations that the financial institutions have to follow and they also get access to financial data of the users, the petition has said.

It has sought immediate framing of regulations to prevent techfin companies from entering into the financial sector or providing financial services through any mode without prior registration or approval from regulators.

It has also sought framing of regulations to ensure data collected while providing financial services is not monetised or used for any other purpose by such companies.


Are Micromax In 1b, In Note 1 good enough to take the brand to the top in India?? We discussed this on Orbital, our weekly technology podcast, which you can subscribe to via Apple Podcasts, Google Podcasts, or RSS, download the episode, or just hit the play button below.

Affiliate links may be automatically generated - see our ethics statement for details.
Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.

Further reading: Amazon, Google, Facebook
OnePlus 9 Pro Could Come With Official IP68 Rating, OnePlus 9 and OnePlus 9E May Not
You Can Now Play Chess With Beth Harmon From The Queen’s Gambit
Share on Facebook Gadgets360 Twitter Share Tweet Snapchat Share Reddit Comment google-newsGoogle News
 
 

Advertisement

Follow Us

Advertisement

© Copyright Red Pixels Ventures Limited 2024. All rights reserved.
Trending Products »
Latest Tech News »