New Delhi, 11 Jan (KNN) The Reserve Bank of India’s decision to allow financial technology companies to access data from credit information bureaus is set to bring a highly unregulated segment within the regulatory purview. But experts said the new rules are likely to benefit a few companies, with concerns on data protection still unaddressed.

Until now, only regulated entities such as credit institutions and specified users like telecom companies, insurance providers, rating agencies and registered brokers had access to such data.

“This decision is in the right direction but should be inclusive of foreign fintech companies following due diligence,” said Anil Bhardwaj, Secretary General Federation of Indian Micro and Small & Medium Enterprises (FISME).

“The majority of the fintechs are majorly foreign VC/PE funded and may not meet the ownership condition. The intent may be to allow entities to observe local data governance and compliance, but the same can be achieved through operating model conditions rather than through ownership conditions,” said Vivek Belgavi, partner, PwC India.

Fintech firms partnered with banks and assisted in processing customer related information without having any access to such information. That said, some companies even allegedly accessed information by acting as a conduit for customers to access their credit reports.

RBI’s latest rule suggests any company incorporated in India and controlled by Indians can now be classified as a specified user.

These entities should have diversified holding and not less than three years of experience to access data. This would mean that fintech companies will be allowed to classify as specified users to access information in a regulated manner as per the Act.