Earlier this week, the Reserve Bank of India (RBI) definitively stated that it would not reconsider its decision to impose stringent restrictions on the operations of Paytm Payments Bank. This announcement from the central bank effectively quashes any speculation in the market, particularly among some players who anticipated a potential easing of restrictions. The speculation arose following a meeting last week between Paytm’s CEO, other top officials, RBI officials, and the finance minister.
Why RBI gave one month notice to Paytm
Das said that RBI gave one month to Paytm to ensure that customers don’t face too much of inconvenience. “The priority is to ensure that customers do not face any inconvenience. That is why we gave one month for the transition,” Das said.
“Act when we don’t see effective action”
“We take all decisions after a lot of discussion, after much consideration. We look at all the aspects, weigh the pros and cons and the angularities. It is done after discussion with the regulated entity… Sometimes these discussions go on for months, at times for two-three years, with any regulated entity. We act when we don’t see effective action,” RBI governor Shaktikanta Das told reporters after a post-budget meeting of the central board, which was addressed by finance minister Nirmala Sitharaman.
Rubbishes claims that action against RBI will hurt fintech industry
Das dismissed claims of some startup founders that the regulatory action against RBI will impact the entire fintech space and innovation. “RBI has always supported fintech and sought to encourage its growth and it wants it to grow. Fintech sector has a very crucial role because it has lakhs and crores of customers. There are several facilities – money can be kept in a wallet, there may be depositors in a payment bank. Customer interest and financial stability are of prime importance. In a regulated environment you have to follow the regulations to run your business,” he said.
