Treat data as fiduciary responsibility, not asset: RBI Governor tells fintechs

Mumbai: Reserve Bank of India (RBI) Governor Sanjay Malhotra during the Global Fintech Fest 2026, in Mumbai, Maharashtra, Thursday, Sept. 10, 2026
| Photo Credit:
KUNAL PATIL

Speaking at the Global Fintech Festival 2026, RBI Governor Sanjay Malhotra issued a stern warning to fintech companies, advising against business models built on regulatory loopholes or the “scale now, apologize later” approach.

Key Takeaways

• RBI Governor Sanjay Malhotra warned fintechs against building business models on regulatory loopholes or a ‘scale now, apologize later’ approach.
• Speaking at the Global Fintech Fest 2026, he said regulatory sandboxes are designed for supervised collaboration, not workaround exploitation.
• Malhotra said firms working transparently with regulators gain faster, more sustainable growth.
• He framed transparency as a strategic advantage rather than a compliance burden for fintech companies.

Addressing the audience, the Governor highlighted that the regulatory sandbox and pilot programs are designed for collaboration. “These mechanisms allow innovators to test their assumptions under supervision and help us craft rules that support genuine progress,” Malhotra stated.

He emphasized that transparency is a strategic advantage, noting that firms working closely with regulators gain faster, more sustainable growth. Conversely, those attempting to circumvent rules will eventually face regulatory consequences that are far more costly to both their business and customer trust.

The RBI maintains a flexible, light-touch regulatory stance during the early stages of innovation when risks are low. However, the Governor clarified that as a business expands and begins to pose systemic risks or impact consumer welfare, more rigorous oversight becomes necessary.

Malhotra stressed that as fintechs grow in user base, lending volume, or payment processing, their responsibilities must expand accordingly. He argued that large-scale players have duties that extend beyond their shareholders to the entire financial ecosystem.

“I would describe this as the obligation to be not just ‘too big to fail’ but ‘too significant to be careless.’ Operational resilience, cybersecurity, and business continuity are not optional costs; they are the fundamental price of achieving significant scale,” the Governor remarked.

He further urged the industry to pivot its focus toward financial inclusion. While many companies prioritize existing, digitally literate customers for ease of profit, Malhotra called for innovation to target the underserved populations who remain outside the formal financial system.

Prioritizing Consumer Trust

Regarding the integration of Artificial Intelligence, the Governor warned that fintechs must proactively manage risks such as algorithmic bias, data privacy, cybersecurity, and the loss of human judgment to preserve public confidence.

A central theme of his address was the ethical handling of information. Malhotra urged fintech leaders to view data as a fiduciary duty rather than just a commercial asset.

“Fintechs hold something far more precious than capital: the personal financial data of real individuals. This data must be treated with the same care a trustee uses for a beneficiary—collected for specific purposes, used only with explicit consent, and protected with utmost rigor,” he said.

He pointed to the Account Aggregator framework as a gold standard for consent-based data sharing, ensuring that no single entity can exploit private information. Malhotra encouraged firms to embrace this architecture as a core value rather than a mere compliance checkbox.

The Governor concluded with a warning: companies that prioritize the monetization of data over its protection risk an irreparable erosion of trust that can be impossible to rebuild.

Published on September 10, 2026