LI NETWORK
Division Bench of Chief Justice DN Patel and Justice Prateek Jalan of the Delhi High Court issued notice to the Central Government and Reserve Bank of India in a public interest litigation petition.
The notice directs them to formulate guidelines to regulate the performance and entry of “TechFin” companies such as Facebook, Google, Amazon in the financial sector.
The bench also sought response from SEBI, National Payments Corporation of India, Insurance Regulatory & Development Authority of India, and Pension Regulatory & Development Authority of India.
The petitioner was represented by Advocate Deepak Prakash.
The petitioner, Dr. Resmi P Bhaskaran, who is practicing applied economics, stated that the approach of the Indian finance regulators in the entry of global tech companies is “lackadaisical.”
The petitioner submitted,
“The absence of dedicated regulations have allowed non-licensed financial institutions (i.e tech giants) to enter into financial domain by partnering with existing entities and to compete with regulated financial institutions in number of areas, without having to comply with the same.”
It also stated that any client, customer, and investor protection rules or regulations are not supported by the Techfins, which guarantee the prevention of build-up systematic risks.
It claimed that the TechFin entities have an unwanted advantage over the traditional financial institution since they influence the decision of customers with wide-digitized information about them.
The petition was adjourned to January 29.