Mumbai, Sep 10 (IANS) Fintech companies should not build businesses by exploiting gaps between regulatory categories and then seek regulatory clarity after scaling, Reserve Bank of India Governor Sanjay Malhotra said on Thursday, stressing that transparency and early engagement with regulators can help firms achieve faster and more durable growth.

Speaking at the Global Fintech Fest 2026 in Mumbai, Malhotra said fintech firms should use regulatory sandboxes and pilot mechanisms to engage with regulators at an early stage, test their assumptions under supervision and contribute to the development of workable regulations.

He cautioned companies against adopting a strategy of scaling first and seeking regulatory forgiveness later, saying that firms attempting to outrun regulations could eventually face regulatory intervention at a much higher cost, while also risking consumer trust.

Malhotra said fintechs that engage transparently with regulators can build regulatory goodwill and create a more sustainable path to scale. He emphasised that responsible innovation should remain central to the expansion of India’s financial technology ecosystem.

The RBI Governor also stressed the importance of responsible data management in financial services, saying fintech companies should treat customer data as a fiduciary responsibility rather than as a business asset. The approach, he said, is important for maintaining trust as digital financial services expand.

Highlighting India’s position in the global fintech landscape, Malhotra said the country’s fintech ecosystem ranks third globally by funding, attracting $2.4 billion last year, and is home to 30 fintech unicorns.

He said the first phase of India’s fintech journey was primarily focused on building solutions for the domestic market, while the next phase presents an opportunity to build solutions for the world.

According to Malhotra, innovations developed in areas such as financial inclusion, affordable payments, digital identity, interoperable infrastructure and trusted innovation can be adapted for wider global adoption, particularly in emerging economies facing challenges similar to those India has addressed.

He said India’s contribution to the future of global finance would extend beyond exporting fintech products, with the country also having an opportunity to share its approaches, digital public infrastructure, governance frameworks and experience with other nations.

“India has the opportunity to become a trusted partner in shaping the future architecture of global finance,” Malhotra said.

–IANS

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