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Informist, Thursday, Sept. 10, 2026

 

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--RBI Malhotra: Ask fintechs to treat trust not as constraint but its purpose 
--RBI Malhotra: Remain committed to dialogue with fintech ecosystem 
--RBI Malhotra: To ensure India remains leader in shaping emerging tech 
--RBI Malhotra: To ensure India remains leader in shaping emerging tech 
--RBI Malhotra: Will step in only when issues gain scale 
--RBI Malhotra: Will like to keep regulation light touch 
--RBI Malhotra: Unified Fintech Forum to be self regulatory body for fintech 
--RBI Malhotra: India has potential to shape future of global finance 
--RBI Malhotra: India has potential to shape architecture of global finance 
--RBI Malhotra:Next decade presents opportunity to build global Fintech here 
--RBI Malhotra: Rules catch up with firms seeking to outrun them 
--RBI Malhotra: Trust erodes when entity uses data as commodity 
--RBI Malhotra: Fincl institutions must take systemic responsibility 
--RBI Malhotra: Need to treat data as fiduciary responsibility 
--RBI Malhotra: AI beginning to transform fincl services 
--RBI Malhotra on tech use: Trust takes yrs to build, can be lost in minutes 
--RBI Malhotra: Trust foundation of every financial system 
--RBI Malhotra:Too much effort of industry going towards those already banked 
--RBI Malhotra: Can use AI for consumer service, credit offtake, curb frauds 
--RBI Malhotra: Today's innovation must focus on last-mile coverage 
--RBI Malhotra: Too much industry effort gravitates to those already banked 
--RBI Malhotra: Potential to impact least realised in hard to reach areas 
--RBI Malhotra: Need to make all fincl services ubiquitous, omnipresent 
--RBI Malhotra on digital fincl svcs: Have miles to go before we sleep 
--RBI Malhotra: Last mile credit delivery cannot be done by banks alone 
--RBI Malhotra: Need to make all fincl services, ubiquitous, omnipresent 
--RBI Malhotra: Digital finance has quietly become part of normal daily life 
--CONTEXT: RBI Governor Malhotra speaking at Global Fintech Fest 2026 
--RBI Malhotra: Innovation has to be anchored in trust
 

 

MUMBAI – Reserve Bank of India Governor Sanjay Malhotra on Thursday announced the Unified Fintech Forum as the second self-regulatory organisation for the fintech sector. Addressing the Global Fintech Festival 2026 here, the governor said the central bank believes "regulation and innovation are not opposing forces, but they are mutually reinforcing pillars of a resilient financial ecosystem". 

 

"At the same time, we are building digital public infrastructure for the next generation of financial services," the governor said. In 2024, the RBI had recognised Fintech Association for Consumer Empowerment as the first self-regulatory organisation for the fintech sector.

 

Malhotra said digital finance has become part of normal life, but "we have miles to go before we sleep" in terms of digital financial services. He said artificial intelligence is beginning to transform financial services and help banks improve last-mile credit delivery. Such innovation in financial services must be anchored in trust, he added. 

 

According to the governor, the banking sector and the fintech industry are constantly gravitating toward customers who are already banked. The real challenge now is reaching the last customer not covered by the formal banking system, he said. These individuals are generally low-value customers using products that offer low margins, but it is necessary to bring them into the formal credit system, Malhotra said. Fintechs will have to play a key role in this, he added.  

 

"We need to make all financial services ubiquitous, omnipresent. Financial inclusion, or ensuring the financial well-being of everyone, to my mind, remains the single most important purpose or potential that fintech can deliver," Malhotra said. 

 

The governor said fintech companies and the financial sector at large can use artificial intelligence in consumer services, credit off-take, and fraud prevention. While AI must be used to boost the penetration and adoption of financial services, the industry must remain cautious, he said. 

 

According to him, it takes years to build trust, but it can be lost in minutes. As India progresses with digital innovation, fintechs must view regulation not as a constraint but as a guardrail that will protect both consumers and the sector. Considering trust is the foundation of every financial system, Malhotra said institutions must take systemic responsibility for providing a trustworthy ecosystem. 

 

The trust that Indians have shown in the financial and digital ecosystem can quickly erode if personal data is treated as a commodity, the central bank head said. Regulated entities must treat data as a fiduciary responsibility and protect it from unauthorised access, he said.

 

"I would urge all of you to treat data as a fiduciary responsibility, not as a business asset," he said. "Every fintech in this room holds something which is much more valuable than the capital that these fintechs hold, and that is the data, financial as well as non-financial, of very real people like you and me. This data must be treated the way a trustee treats assets held for a beneficiary, collected with a clear purpose, used strictly within the consent provided, and protected as though it were one's own," the governor said.

 

Along with trust, the governor said responsibility and regulation should be the other two key factors that the digital finance ecosystem should adopt. The governor said India has the potential to shape the future of global finance, and the next decade presents an opportunity to build global finance in India. Financial institutions must take systemic responsibility that scales with size, he said.

 

"Many fintechs may be outside the perimeter of prudential regulation, and rightly so, since proportionate regulation should not burden early-stage innovation," Malhotra said. "But as firms' payment volumes, lending book or user base grows to a point where its disruption could meaningfully affect the financial system, that firm has a responsibility, and that responsibility goes beyond the balance sheet of the firm."

 

Fintechs should treat operational resilience, business continuity, and cyber security as a price of the scale they have achieved, Malhotra said. The governor also cautioned against structuring a business around gaps between regulatory categories and later seeking clarity or forgiveness.

 

"The sandbox and pilot mechanism that we have built exists precisely so that the innovators can engage in a study, ask questions, test assumptions under supervision, and shape rules that are workable for genuine innovation," he said. "A firm that seeks to outrun the rule typically finds sooner or later that the rules catch up at a much higher price to itself and to the trust of the consumers themselves."

 

Malhotra said the Reserve Bank remains committed to dialogue with the fintech ecosystem through the RBI Innovation Hub. "I would ask in turn that these fintech innovators treat trust not as a constraint on innovation but as its very purpose," he said. 

 

The RBI and Securities Board Exchange of India have unveiled a pilot for the tokenisation of corporate bonds. "We try to keep regulation light-touch where innovation is nascent and risk contained, and step in our regulation only when the activity goes to scale or consumer-conduct-related issues become important," Malhotra said.  End

 

Reported by Priyasmita Dutta, J. Navya Sruthi, Kabir Sharma, and Sagar Sen

Edited by Saji George Titus

 

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