The government and the Reserve Bank of India have bolstered India’s fintech ecosystem with regulatory and consumer protection initiatives, focusing on digital lending platforms and payment aggregators. Measures include a self-regulatory framework for fintech and enhanced digital personal data protections, AI-based fraud detection, and a national cybercrime reporting system. Officials have been actively collaborating with financial regulators and stakeholders to address fintech ecosystem issues, particularly concerning digital lending platforms and payment aggregators. Notably, the Reserve Bank of India introduced a “Framework for Self-Regulatory Organisation(s) in the FinTech Sector” on May 30, 2024, aimed at setting regulatory standards, promoting ethical conduct, resolving disputes, and ensuring transparency among members.
Various regulatory and supervisory actions have been implemented following assessments, such as the issuance of Master Directions on Digital Payment Security Controls in February 2021 by the RBI to combat web and mobile app threats. These guidelines mandate banks to adhere to a common minimum standard of security controls across payment channels like internet, mobile banking, and card payments. Additionally, the National Payment Corporation of India (NPCI) offers fraud monitoring solutions to banks through AI/ML-based models for Unified Payments Interface (UPI) transactions.
To safeguard personal data, the Ministry of Electronics and Information Technology (MeitY) has introduced the Digital Personal Data Protection Act, 2023 (DPDP Act) and DPDP Rules 2025. Furthermore, RBI has established a Regulatory Sandbox framework since August 2019, enabling the testing of innovative financial products or services in a controlled regulatory environment. The Ministry of Home Affairs has launched the National Cybercrime Reporting Portal and a National Cyber Crime Helpline number “1930” to protect consumer interests and facilitate reporting of cyber incidents, including illegal loan apps. Banks also offer platforms like the ‘SACHET’ portal and the State Level Coordination Committee (SLCC) for citizens to lodge complaints regarding illegal money deposits or collections.
