Centre considering new classification code to improve tracking of India's growing fintech space

The government is aiming for a separate National Industrial Classification (NIC) code for fintech companies in a bid to build a reliable database of entities operating in the sector, people familiar with the development have told Moneycontrol.

It is learnt that discussions are underway to devise a framework to measure and monitor fintechs as the current system relies largely on voluntary disclosures and Reserve Bank of India (RBI) data, which does not capture the entire universe, said the government official.

The proposal is being discussed to ensure that fintechs are identified at the time of registration, enabling better oversight, since the sector has been expanding rapidly.

As there is currently no dedicated NIC code for fintechs, the Ministry of Corporate Affairs (MCA) cannot tag such companies distinctly during registration - a gap the government now wants to address by asking the Ministry of Statistics and Programme Implementation (MoSPI) to create a new classification.

“We don’t have a structured way of knowing how many fintech firms exist or what kind of activities they are engaged in. Right now, data is scattered across multiple regulators and voluntary filings. Creating a separate NIC code will give us a clean starting point to measure and monitor the sector,” the government official said.

When companies register with the MCA, a classification code issued by MoSPI is used during registration. “If fintech gets its own NIC code, every company that registers will be classified correctly from day one. That data can then be consolidated to build a central fintech database,” the person added.

“RBI’s database covers only licensed entities like payment aggregators and NBFCs, and even DPIIT’s startup registry is voluntary. This leaves (businesses of) a large part of the ecosystem unaccounted for. We need our own classification system to close that gap,” the source further said.

Data Gap

At present, there is no central database of fintech companies in India. The RBI only tracks entities it directly licenses, while MCA does not have a separate classification at the time of company registration. The Department for Promotion of Industry and Internal Trade (DPIIT) recognises fintech startups under the Startup India initiative, but this is voluntary, and covers only a subset of the sector.

The absence of a clearer classification has made it difficult to assess the actual size and growth of India’s fintech ecosystem, despite its increasing importance in the financial landscape, the source said.

Finance Minister Nirmala Sitharaman had recently highlighted the pivotal role that fintechs have played in transforming India’s financial sector. Speaking at the inauguration of Incubation Centre at IIT Dharwad on October 14, FM Sitharaman said the rapid expansion of digital infrastructure and fintech applications has allowed credit to be delivered without collateral, while enabling near-universal access to payments.

“Fintech has built a fantastic foundation both for rural and urban India,” the FM said, underscoring the fintech innovation that has enabled millions to access formal credit and payment systems.

The push for a dedicated NIC code is seen as a complementary move to such initiatives, helping the government and regulators map the sector more comprehensively and tailor policy accordingly.

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The move could also bring greater regulatory clarity and targetted support for fintech companies. It may also allow policymakers to distinguish between different categories of fintechs - lending platforms, payment service providers and embedded finance firms – and design frameworks suited to their business models, the source said.What is the National Industrial Classification (NIC) code?

The NIC code is a statistical standard used for classifying business activities in India. It is developed by the Ministry of Statistics and Programme Implementation (MoSPI) and applied at the time of company registration through the Ministry of Corporate Affairs (MCA). It helps the government collect, analyse and compare data on different industries.Why is a separate NIC code for fintech needed?

Currently, fintech companies are classified under broad categories such as financial services or IT services, making it difficult to track the exact number and type of fintech firms. A separate code would enable clear identification at the time of registration, help build a centralised fintech database and improve oversight.How are fintech companies currently tracked?

There is no single database for fintech companies. RBI tracks only licensed entities such as payment aggregators and non-banking financial companies (NBFCs), while DPIIT recognises some startups under the Startup India initiative on a voluntary basis. MCA records do not have a separate fintech tag.What could change once the fintech NIC code is introduced?With a new NIC code, every fintech company will be identified during the registration process, allowing the government to build a comprehensive registry. This could help with better policymaking, targetted regulation and designing support measures for specific fintech segments.