Financial services sectors the world over follow a common template: companies innovate, regulators regulate. The former searches for pools of customer dissatisfaction to target with innovative products that often push the regulatory envelope. The latter keenly observe from the sideline, stepping in every now and then to lay down rules to impose some semblance of order.
But in August 2016, India took its first formal step to break the walls that existed between those who were being regulated and those who were regulating. Impatient and wary with both the pace and quality of private sector innovation, The Reserve Bank of India, India’s apex banking and payments regulator, took the unprecedented step of revealing its hitherto invisible hand of regulation.