Speaking about RBI’s order against Paytm Payments Bank (PPB), Reserve Bank of India Deputy Governor Swaminathan J. asserted that the action was taken against the fintech player after persistent non-compliance.
“We don’t want to discuss details of action on Paytm Payments Bank. This is supervisory action for persistent non-compliance. Such action is invariably preceded by months and sometimes years of bilateral engagement where we point out the deficiencies but also give time to take corrective action. As a regulator, it is incumbent upon us to protect the consumer,” RBI Deputy Governor Swaminathan J said at the post-policy press briefing in Mumbai.
#WATCH | On Paytm issue, RBI Deputy Governor Swaminathan Janakiraman says, "This is a supervisory action on a regulated entity for persistent non-compliance…" pic.twitter.com/oCbk8UC68j
— ANI (@ANI) February 8, 2024
Meanwhile, in a briefing after the monetary policy committee address, the RBI governor Shaktikanta Das also responded to questions on the action against Paytm Payments Bank. He said, “We give sufficient time to every entity to comply and sometimes more than sufficient time to the entities for compliance. If they would comply, why would a regulator like us would have to take action?”
“RBI will be issuing a set of FAQs (frequently asked questions) next week to assuage public concerns following the Paytm action,” he added.
The RBI Governor also added that the RBI is a responsible regulator and there is no worry about the (financial) system at the moment.
“Let me put the record straight on the Paytm issue. There is no worry about the entire system. It is an issue with a specific institution,” RBI Governor Shaktikanta Das said.
Action taken by RBI against Paytm Payments Bank
For the unversed, on January 31, the RBI imposed major restrictions on the operations of Paytm Payments Bank Ltd (PPBL) which included not onboarding new customers with immediate effect and to stop accepting deposits or top-ups in customer accounts, wallets, FASTags, and other instruments from February 29.
The action was taken over persistent non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action, the RBI stated in a press release.
News agency PTI citing sources reported that money laundering concerns and questionable dealings of hundreds of crores of rupees between popular wallet Paytm and its lesser-known banking arm had led the Reserve Bank of India to clamp down on the Paytm Payment banks run by Vijay Shekhar Sharma.
