In the backdrop of the ongoing issues with Paytm, Finance Minister Nirmala Sitharaman has planned a meeting with the heads of fintech companies in the coming week. The aim is speculated to be stress on the need to adhere strictly to regulatory compliance.
Last month, Paytm Payments Bank Ltd, a company promoted by One97 Communications Ltd, has faced regulatory actions from the Reserve Bank due to non-compliance with several regulatory norms, including Know Your Customer (KYC) guidelines.
Sources indicate that the purpose of the FM’s meeting with the CEOs of fintech companies is to discuss their concerns and challenges. The meeting is anticipated to include senior officials from the Reserve Bank, the finance ministry, and the Department for Promotion of Industry and Internal Trade, among others.
At least 20 fintech companies, related to lending, payment processing and mutual funds are reported to be called for the meeting.
Why Paytm may not be in the list of invitees
Sources said that Paytm is unlikely to be called for the meeting. Reason is said to be that the meeting is not on Paytm Payments Bank per se. Without taking any sides, the FM is likely to emphasise on the importance to adhere to KYC norms and compliances.
Incidentally, Paytm CEO as well as the company’s senior officials met FM as well as senior officials of RBI earlier this month. Reserve Bank Governor Shaktikanta Das, in a media interaction, stated that the central bank is always supportive of the fintech sector and is committed to its rapid growth.
RBI extends Paytm Payment Bank’s ‘deadline’
Recently, the RBI advised customers and merchants of Paytm Payments Bank Ltd (PPBL) to transfer their accounts to other banks by March 15. This gives the troubled entity an additional 15 days to wind down most of its operations, including deposit and credit transactions.
The initial deadline was February 29, 2024, but the RBI extended it by 15 days considering the interests of PPBL’s customers (including merchants) who might need more time to arrange alternatives in the larger public interest.
The RBI has also ordered the closure of the ‘nodal accounts’ of One97 Communications Ltd, the owner of the Paytm brand. One97 Communications, which holds a 49% stake in PPBL, considers it an associate company rather than a subsidiary.
