Financial Services Secretary: Fintechs Must Be Innovative While Adhering To Standards

Nitin Konde, Varun Bhardwaj

Jan 9, 2025 — 3 min read

Financial Services Secretary Urges Fintechs to Innovate Responsibly

On January 7, Nagaraju Maddirala, secretary of the Department of Financial Services (DFS), urged fintech companies to "consistently" provide creative solutions to the financial services sector while "strictly" adhering to rules. He said this while presiding over a conference in New Delhi with cofounders and senior executives from significant fintech companies. Kunal Shah, the founder of CRED; Bipin Preet Singh of MobiKwik; Sharath Bulusu of Google Pay; and officials from BillDesk, Infibeam Avenues, and Razorpay were among those present at the meeting. The gathering was also attended by industry organisations like the Digital Lenders Association of India, the Payments Council of India, and the Startup Policy Forum. According to a statement, "the goal of the engagement with partners from the startup and fintech ecosystem was to promote an open exchange of ideas aimed at elevating the fintech sector to a global standard."

Digital Payment Systems Required Deeper Penetration

Maddirala praised the Indian fintech industry's explosive expansion over the last ten years and emphasised the necessity of enhancing digital payment systems in rural and northeastern areas, especially with UPI. He also urged the stakeholders to support micro, small, and medium-sized businesses (MSMEs) through "lending based on digital footprints." According to the official announcement, Maddirala outlined the several steps the Centre has made to foster an atmosphere that is supportive of the fintech industry. Officials from the Reserve Bank of India (RBI), the National Payments Corporation of India (NPCI), the Financial Intelligence Unit (FIU), and the Ministry of Electronics and IT (MeitY) also attended the conference.

2024 Not a Promising Year for Fintech Startups

The gathering takes place while the domestic fintech sector continues to suffer from a lack of capital. Indian fintech firms raised $2.5 billion in 2024, a 19% decrease from $3.1 billion the year before, despite being the most funded industry last year. The fintech ecosystem had a drop in funding for the third year in a row in 2024. Nonetheless, the number of deals in the industry increased by 23% from 2023 to 2024, from 132 to 162. Last year, the fintech industry also achieved a $30 billion funding milestone (from 2014 to 2024) and welcomed two new unicorns to its portfolio: Moneyview and Perfios. Finova Capital, Drip Capital, and M2P were notable for securing some of the largest agreements in 2024, with each deal exceeding $100 million.

India’s Fintech Ecosystem Still Leading the Global Race

In spite of this downturn, the Indian fintech ecosystem is one of the top three globally financed fintech ecosystems in H1 2024, after the US and the UK. According to Tracxn's Geo Semi Annual Fintech India Report for H1 2024, the ongoing funding winter and a number of other geopolitical challenges are to blame for the funding fall. Compared to one in H2 2023, two funding rounds totalling more than $100 million were observed during that time. These include the $120 million Series C funding round raised by lending platform Avanse and the $144 million Series D funding round raised by non-banking lender Credit Saison.