The fintech industry in India has witnessed tremendous growth, and regulatory oversight has played a crucial role in ensuring its stability. However, greater transparency in regulatory communication and an evolution in regulatory processes are necessary to create a more predictable environment for businesses, according to Harshil Mathur, CEO & Co-Founder of Razorpay, and Shashank Kumar, MD & Co-Founder of Razorpay.

“People see the final action, and they sort of panic,” Kumar noted. “There needs to be something in between, where the regulator can indicate to the market that things are going wrong, allowing companies to correct course. Today, this happens more internally, and people don’t get an opportunity to read through it.”

‘Regulatory frameworks necessary’

While regulatory scrutiny is often seen as a challenge, Mathur believes it is both inevitable and essential. “At the scale at which we operate, and the industry we are in, regulations are a given—and rightly so,” he said. The financial sector has matured significantly over the last decade, making regulatory frameworks necessary to safeguard national interests.

According to Mathur, one of the key reasons for regulatory intervention is to build consumer trust. Many Indians are still getting accustomed to digital payments, and clear rules help ensure they feel secure using financial technology. “We need guardrails, especially in a country where people are still learning to trust digital payments. Users should not have to worry about where their money goes or whether it is safe,” Mathur explained.

Despite increasing scrutiny from regulators, Mathur does not believe there is overreach. According to him, every major industry has some level of regulation, and fintech is no exception. “If you are a mature industry, regulations are part of the game. Almost every large sector in this country operates within some regulatory framework,” he added.

What’s fuelling India’s fintech boom?

Adaptability, according to Kumar, is key in a rapidly evolving market. “When you drive a car, sometimes you accelerate, sometimes you brake—that’s part of the cycle. Good founders must anticipate, learn, and adapt,” he said.

India’s fintech boom, both executives agreed, has been possible due to regulatory support. “India’s financial market is one of the most dynamic in the world. The fintech sector has done really well, and that couldn’t have happened without regulation,” Kumar noted.

Ultimately, while regulation is necessary for the fintech sector’s stability and consumer trust, a more open and phased approach to regulatory changes can help businesses navigate challenges more effectively.

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