Action against Paytm was for "persisted non-compliance," and adequate time was given for corrective actions, says RBI Deputy Governor Swaminathan J.
RBI Governor Shaktikanta Das addressed concerns surrounding entities like Paytm, emphasising the regulator's commitment to responsible oversight. Das asserted that regulatory action is only necessary when compliance requirements are not met, emphasising the RBI's role as a responsible regulator.
He reassured the public regarding the stability of the financial system and addressed fears surrounding fintech firms in the wake of the Paytm crisis during a press conference.
Das affirmed the RBI's ongoing support for innovation and technology in the financial sector, underscoring the commitment to promoting fintechs and innovation. While acknowledging engagement with Paytm over time, Das refrained from disclosing granular details on the issue.
"RBI will continue to support innovation in financial sector, let there not be any doubt around it," said Das.
"We give sufficient time to every regulated entity to comply with the requirements," he said.
He stressed the importance of individual entities prioritising regulatory compliance for long-term success, noting that all actions by the RBI are aimed at ensuring systemic stability and protecting customers' interests.
"Our emphasis is always on bilateral engagement with regulated entities, with a focus on nudging the entity to take corrective action," said Das.
"When constructive engagement doesn't work or when a regulated entity does not take effective action, we go for imposing business restrictions," he added.
Additionally, the RBI directed the payments bank to settle all pending transactions and nodal accounts by March 15, with no further transactions permitted thereafter. Emphasising a customer-first approach, the RBI pledged to address feedback received and minimise customer inconvenience.
Regarding access to Paytm services, Swaminathan noted the regulator's focus on customer-centric solutions and emphasised each bank's autonomy in making decisions regarding partnerships with Paytm.
The RBI's directive to Paytm Payments Bank, which is 49 per cent owned by Paytm's parent company, to halt its mobile wallet business and other activities came after persistent non-compliance and supervisory concerns were raised.
(With PTI inputs)
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