The RBI is going after fintechs on KYC checks

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Editor's note: There is an uneasiness setting in over the fintech industry. It has been less than a month since the Reserve Bank of India cracked down on the business model of many buy now pay later startups, prohibiting all lending institutions from issuing a credit line to digital wallets or prepaid cards. The RBI’s move—seen as an attempt to weed out one of the several regulatory ambiguities governing India’s young digital lending industry—has led to several high-profile startups having to alter their terms of service. In some cases, they even discontinued products overnight. That, however, is only the beginning of a series of impending actions aimed towards streamlining fintech regulations in coming months. According to five industry executives briefed on the matter, the next intervention in line is the tightening of know your customer and customer onboarding norms for fintech firms. According to the executives, the central bank has been engaging with the fintech industry, reviewing practices and seeking regular audit reports as part of its strategy to increase supervision of the rapidly evolving industry. The RBI is said to be …