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Within the wake of the Paytm disaster, many educated of us have shared insightful views. Some are supportive of and a few are in opposition to Paytm. Nevertheless, a key side has been lacking in all of the debates and arguments which I felt must be highlighted.

 We being a SEBI-regulated entity very nicely perceive the significance of regulatory compliance. Compliances are in place to make sure:

– Providers supplied within the curiosity of the top shopper
– Scale back the chance within the system
– Present readability concerning the working framework for checks & balances

Crucial compliance requirement in regulated monetary providers enterprise is KYC (Know Your Consumer). KYC is actually required to make sure professional cash will get into the system. It’s an environment friendly means of blocking shady operators/hawala cash from moving into the system and getting used for actions that may threaten the financial, social, and monetary stability of the nation.

KYC in a nutshell is the spine of complying with PMLA (Prevention of Cash Laundering Act) rules. Its significance is commonly reminded by the regulators within the type of circulars, periods, and through audits. Taking this frivolously is unthinkable and unpardonable by the regulators who’ve the accountability to make sure the long-term stability of the system. That is the place Paytm failed large time amongst different vital issues.

There isn’t a denying that following the compliances is time-consuming, costly, and hinders progress. Even we at Truemind crib generally that how a lot time and prices we have now to spend on compliance.

Little doubt, there’s a robust want for regulators to scale back the compliance burden to free bandwidth for companies to concentrate on innovation and progress. However there are some sacrosanct necessities which may’t be and shouldn’t be breached and all companies must be aware of that.

Progress shouldn’t be on the expense of adhering to vital regulatory necessities.

This episode with Paytm jogs my memory of the clever phrases of Pual McNulty –
“If you happen to suppose, compliance is dear, attempt non-compliance“.

Initially posted on LinkedIn: www.linkedin.com/sumitduseja

Truemind Capital is a SEBI Registered Funding Administration & Private Finance Advisory platform. You’ll be able to write to us at join@truemindcapital.com or name us at 9999505324.