Paytm crisis: RBI to not review action against Paytm Payments Bank

Paytm crisis: Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the central bank’s regulatory action against the fintech’s payments arm will not be reviewed. His comments came after speculation that RBI could review its decision following the meeting with Paytm founder Vijay Shekhar Sharma. 

On January 31, RBI had ordered Paytm Payments Bank to shut most of its operations, including deposits, credit products, its digital wallets as well as asked it to stop onboarding new customers due to “persistent non-compliance”. 

Last week, RBI during the MPC meeting announcements, while refusing to furnish further details of the case said that such regulatory action is invariably preceded by months and sometimes years of bilateral engagement, where the central bank not only points out deficiencies but also gives time for corrective action. “As a regulator, it is incumbent upon us to protect the consumer," RBI Deputy Governor Swaminathan J said. 

RBI Governor Shaktikanta Das said that there is no worry for the fintech system, just with a specific institution. 

"Our focus is always on engaging with regulated entities bilaterally and we nudge them to take corrective action. We give them sufficient time to take corrective action…,” he had reiterated his colleague’s statements.

They pointed out that Paytm’s case is not one of regulatory deficiency but of non-compliance. 

Meanwhile, from Paytm’s end, the company has decided to form an advisory committee to look into compliance and regulatory matters. Former SEBI chairman M Damodaran will lead the panel that will work closely with the board.

Also read: 'We are open to working with Paytm if...': Axis Bank in talks with firm since January 31