Gurgaon, Feb. 19 -- India's banking regulator has no plans to impose extreme penalties on the country's fintech sector, according to a top official, weeks after shocking investors by unexpectedly suspending much of the activities of Paytm Payments Bank, founded by high-flying billionaire Vijay Shekhar Sharma.

The central bank would welcome self-regulation in the sector. "No harsher measures are coming on fintech," P. Vasudevan, an executive director in charge of enforcement at the Reserve Bank of India, said on Friday. According to Vasudevan, the central bank would welcome self-regulation in the sector, but enterprises must adhere to data privacy standards. He stated that the supervisor intends to take a hands-off approach to fintech reg...