Indian banks and non-banking financial companies are recalibrating their partnerships with fintech firms in response to the RBI’s new draft guidance and the Digital Personal Data Protection Act, signalling a major shift in industry compliance and funding trends.
Banks and non-banking financial companies are preparing for a broad rewrite of how they work with fintech firms as India’s privacy and data-governance rules tighten. According to Business Standard, lenders have begun speaking with legal, consulting and regtech firms as they assess how the Reserve Bank of India’s draft guidance on data governance, together with the Digital Personal Data Protection Act, will change their contracts and controls.
The RBI’s draft guidance, released for public comment in July and closed on 17 August, requires regulated entities to build a formal data governance framework aligned with risk management, with board oversight and stronger scrutiny of third-party arrangements. Industry summaries of the draft show that it covers data classification, lineage, quality management, reporting and periodic review, while also pushing firms to manage data shared with outside partners more tightly.
Senior bankers told Business Standard that current fintech agreements now need to be revisited because the compliance burden has risen sharply. Some said the Indian Banks’ Association and the Finance Industry Development Council, the RBI-approved self-regulatory organisation for NBFCs, may help steer changes that will take time, especially for legacy lenders whose customer data sits in disconnected systems. FACE, the fintech sector’s self-regulatory body for consumer-focused firms, said it is working with members on DPDP compliance as contracts are reworked.
The pressure is not only regulatory but commercial. Trilegal’s Jishnu Sanyal said the DPDP rules create steep penalties and make clearer responsibility between data fiduciaries and data processors essential, while RBI outsourcing norms require regulated entities to pass on risk-based obligations to fintech partners. Grant Thornton Bharat’s Rohan Lakhaiyar described the moment as a reset for the industry, and Sprinto co-founder Raghuveer Kancherla said compliance is increasingly being built into products from the start rather than added later. Business Standard also reported that fintech funding has slowed markedly, with Tracxn data showing $822.9 million raised so far in calendar 2026, against $2.4 billion in 2025 and $2.2 billion in 2024, a sign that investors are becoming more selective.
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