In Conversation with Amit Kumar, Head of Legal and Compliance, Bharat Financial Inclusion Ltd.

Amit, tell us about your early years in the profession and what was life at law school like in those days.

Legal as a profession came to me naturally as my grandfather was in the legal profession and it came to me as lineage. However, I grew as a professional & made a conscious choice to start with Apex Court and then later move into the corporate world as a legal professional.

To become a successful legal professional your foundation has to be very strong. My Law School played a very crucial role in crafting my career as a professional. While it helps me to understand the basics & it also gave me immense exposure to the corporate world and various legal forums. Live case studies, debates, mock discussions, and moot courts are a few to name here. It groomed me as a legal professional with a business sense. I am very grateful to my professors, seniors, and some of those visiting faculties like High Court judges, Supreme court & corporate lawyers who showed me a different world of the legal profession and empowered me to deal with it    

You are presently working as Head of legal and compliance in Bharat Financial Inclusion Ltd (BFIL). What are your roles and responsibilities at BFIL?

Reply: Head of Legal & Compliance of a financial entity would typically be responsible for the overall legal and compliance function of the entity. 

As a part of Senior Management teams (SMT), my primary role is to support Top leadership (MD & CEO/EVC) in their vision by delivering sound strategic advice and be the gatekeeper for all legal & regulatory matters that may impact the entity.  

A large part of the day goes into Corporate governance by attending different Committees and supporting transactional work – creating the legal and compliance strategies that support different business verticals and help them grow in a compliant manner. The rest of the day is a mixed bag of handling crises, deciding the appropriate strategy for extending solutions in a timebound manner, developing & evaluating new & existing business models and mentoring talent.  

What are the top three challenges in the financial services industry from a regulatory standpoint?

The top 3 Challenges in the Financial Services Industry from regulatory standpoints include 1) Protection from data breaches in an outsourced environment, 2) keeping up with regulations, and exceeding consumer expectations, 3) Cope with compliance on Risk-based classification of an entity

Data breaches are a major concern, as they can lead to the theft of personal information and financial damage. The entity must ensure their data is securely stored and properly encrypted to protect themselves and share on a need-to-know basis under a similar arrangement which is applicable to their own entity and IT Outsourcing policy is in the process as the regulator sought comments from all stakeholders.

Keeping up with regulations of digital lending is another challenge that financial entities must face at the same time meeting the expectation of customers for delivery of service at a click. Further new regulations classifying the entity based on risk are being implemented, and it requires more compliances to entities classified higher in criteria as per regulation which is challenging to cope with it.

Further, financial entity while adopting digital technology, keeping up with innovation requires new skills that are in short supply and require significant efforts to upskill or reskill employees.

COVID-19 has brought uncertainty to every sector, including financial services. How is your sector evolving to the new realities of the post-Covid world?

One thing that Covid-19 taught us is agility, be it as an individual, professional or corporate entity. It forces the financial sector to transform from a caterpillar to a butterfly and take up the challenges of the new normal. 

The Financial Service sector is a sector that has turned this crisis into an opportunity and strategized with innovations through digital Banking, digital payment, the online opening of bank accounts, video KYC etc. and managed to service even the remotest place in the country seamlessly.  Employees of the financial sector worked day and night to ensure that customers do not feel the pain of not having cash in their hands. Dedication and customer-centric approach paid back as the highest ever recorded growth in the financial sector. 

Post-Covid momentous of growing graph in digital mode transaction is continuing in its pace among customers and digital lending guidelines has further given wings to financial sectors. 

On 10 August, RBI came out with its digital lending guidelines to curb illegal activities and mitigate concerns arising from credit delivery by digital platforms. Proactive measure or a much-needed step in the right direction, what are your thoughts on RBI’s digital lending norms?

On August 10, 2022, the RBI has issued a press release and on September 2, 2022, detailed guidelines dealing with the implementation of the recommendations of the working group on digital lending. 

These digital lending guidelines were very much desired and needed at this moment when all are talking about digital mode and happy to say that it exhaustively covers right from the definition of Digital lending to the process of lending, further demarketing involvement of third party & its limitation. Customer is at the centre of this guideline whether it is disclosure to customer or redressal of customer grievances. This guideline has introduced Annual Percentage Rate & Key Facts sheets to be given to the customer and also directed to ensure the protection of information through privacy policy etc.

This Digital Lending guideline shall be considered a milestone in the financial service sector.  

How do you foresee corporate legal departments in the next 5 years? Is the reliance on external law firms on the decline?

The momentum of corporate legal departments is on and continues to be on, as time changes and the role of Legal Departments and its official also change. Now the legal department is playing a crucial role in decision making, policy framing & growth of the entity and its business.

In my view, the role of external law firms is different from that of the Legal Department and the requirement of Law firms shall continue in the financial sector as they share the risk by providing the search report, and feasibility report before and after the sanction of loan to the customers in multiple & diverse location, apart from litigation support in court/tribunal. 

As per a report published in a leading daily, pay packages of General Counsel in top companies have skyrocketed. What would like to say to young lawyers and law students wanting to make a career in an in-house role?

It is true, I know some of my friends & known are also having high pay packages working for the business conglomerate. But my view to take a profession or career is slightly different and it should not be decided on a pay package basis, as all fingers are not the same to the hand.

My suggestion to all aspirants, who want to be an efficient in-house legal professional requires to have a good understanding of law combined with the skill of interpreting the law favouring business requirements. The mantra of success as in-house legal is to have a solution approach to any problem, first understand facts and marry them with the business realities. This aspirant needs to understand the law, the business or client or customer you are catering to and the technology that supports the business.

What is your take on the notion of work-life balance? How are in-house legal teams responding to the possibility of incorporating a hybrid model of working?

Work-life balance is important for every employee in giving the best to the organisation. For me running, jogging, yoga as fitness, reading good literature, playing chess, and going on an outing with family & friends is the desired work-life balance. 

A hybrid model of working is perfectly ok for a member of in-house legal teams looking after advisory, Product & policy, statutory & regulatory compliance aspects. This is a little difficult for those in-house legal team members participating in active litigation attending court hearings, meeting with advocates & conferencing with senior counsel with or without prior appointment.    

Would you please recommend any book that has left a lasting impression on your mind?

The book which inspired me a lot is written by leadership expert and author, Mr Robin Sharma, titled “The Monk Who Sold His Ferrari: A Fable About Fulfilling Your Dreams & Reaching Your Destiny. 

As the subtitle suggests, it’s a fable, and it gives me some thought about life, goals, dreams and how daily habits help in reaching those dreams. In other words, this book is a combination of life strategies. Many of these are useful and also work as I have realised and recommend other to read, who is interested in incorporating routines and habits that can transform their lives, help them achieve their dreams, calm them and make them happier. Undoubtedly, it’s a jumble of too many ideas, but you can pick and choose, and the ideas contained within are potentially very powerful. Plus, it’s a fun and easy read.