The Reserve Bank of India today said Paytm was in persistent non-compliance and the regulator gave it sufficient time to take corrective measures.
The central bank will also come out with an FAQ next week to address queries from various quarters over the issue.
“Over the last few years we have significantly deepened our supervisory systems, approach and methods. our emphasis is always on bilateral engagement with regulatory entities, with a focus on nudging them to take corrective action. Sufficient time is given for undertaking this corrective action When such constructive engagement does not work or when regulated entity does not take effective action, we go for imposing supervisory or business restrictions,” RBI governor Shaktikanta Das told reporters.
Such restrictions that we impose are always proportionate to the gravity of the situation, he said, adding, “All our actions, being a responsible regulator, are for systemic stability and protection of customers interest. These aspects cannot be compromised.”
Individual entities should be mindful of these aspects for their long-term success, Das added.
On a query why RBI did not appoint its nominee on the Paytm board, Deputy Governor Swaminathan Janakiraman said, “As a regulator there are various tools and it is not necessary that every single tool will be deployed in every single situation. We make our own assessment of scale and proportion of the issue and the tool that we will have to use at different points in time. So one size fits all solution may not work in all situations. We may use certain tools or not but we do it after due consideration.”
“We provide the company enough time to take corrective measures,” he said, adding that the action was taken after persistent non-compliance.
On further clarity on the Paytm matter, Das said, “Over the last few days we have received a lot of queries and clarifications from various quarters. We have noted these queries, Based on that we will be issuing FAQs sometimes next week.”