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Within the wake of the Paytm disaster, many educated people have shared insightful views. Some are supportive of and a few are towards Paytm. Nevertheless, a key facet has been lacking in all of the debates and arguments which I felt ought to be highlighted.
We being a SEBI-regulated entity very effectively perceive the significance of regulatory compliance. Compliances are in place to make sure:
– Providers supplied within the curiosity of the top client
– Scale back the danger within the system
– Present readability relating to the working framework for checks & balances
Crucial compliance requirement in regulated monetary providers enterprise is KYC (Know Your Consumer). KYC is basically required to make sure reliable 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) laws. Its significance is commonly reminded by the regulators within the type of circulars, classes, and through audits. Taking this calmly 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 important issues.
There is no such thing as a denying that following the compliances is time-consuming, costly, and hinders progress. Even we at Truemind crib typically that how a lot time and prices we have now to spend on compliance.
Little doubt, there’s a robust want for regulators to cut back the compliance burden to free bandwidth for companies to deal with innovation and progress. However there are some sacrosanct necessities which may’t be and shouldn’t be breached and all companies ought to be aware of that.
Development shouldn’t be on the expense of adhering to important regulatory necessities.
This episode with Paytm jogs my memory of the sensible phrases of Pual McNulty –
“Should you assume, compliance is dear, strive 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.
