On January 31, India’s apex bank Reserve Bank of India (RBI) directed Paytm Payment Bank to stop accepting deposits, credit transactions or top ups in customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards after March 15, other than any interest, cashbacks, or refunds. The announcement sent fintechs into tizzy, however, it also brought attention to the importance of regulatory compliance. Since the ban on Paytm Payments bank, NPCI and RBI have stressed on the importance of following regulatory norms. Here’s what RBI, rivals PhonePe, PineLabs have said about the Paytm troubles.
RBI governor Shaktikanta Das: Action taken after “persistent non-compliance”
RBI governor said that the central bank takes action against regulated entities “only after a comprehensive assessment.” Das further added that the action was taken due to “persistent non-compliance” by Paytm Payments Bank. He said that RBI’s decisions are well thought out. Ruling out any relaxations, Das said, “at the moment, let me say very clearly, there is no review of this (PPBL) decision. If your are expecting a review of the decision, let me very clearly say there is (going to be) no review of the decision”.Sameer Nigam, co-founder and CEO of PhonePe: There was ample time for the company to have acted or responded
“I think there was ample time for the company to have acted or responded. I can only go by what it seems that actions are proportionate to the lack of compliance seems about right, and I’m very curious. You guys are reading as much as I’m reading. I don’t have any inside information,” Nigam noted. “On attracting rival customers, when there is a loss, we get a proportionate share (of customers). One will call me a hypocrite if I say we won’t get any of them (Paytm Payments Bank customers). If I said, I’ll try to get them all, you will call me an opportunist. I’ll just say, some of them will come.” said Nigam while speaking at an event in Mumbai recently. Pinelabs: Trust cannot be bought
Pine Labs came up with their digital ad campaign saying, “The front page can be bought. Trust cannot”. The ad further said that around “One Million businesses across India count on Pine Labs to power their business in-store, one transaction at a time. Explore the range of our in-store solutions.” Pinelabs’ ad followed Paytms’s full page ads in newspapers to dispel rumours that Paytm Soundbox will stop working.
Harshil Mathur, CEO, Razorpay: Regulators have efficiently balanced innovation with risk management
Regulations in the fintech industry have enabled India to become a global benchmark in fintech and unified payments interface (UPI)-based services are one such example, Harshil Mathur, CEO of full-stack financial services platform Razorpay, told news agency IANS. “We firmly believe that regulations in the fintech industry have enabled India to become a global benchmark in the sector,” Mathur emphasised. “As the financial ecosystem and digital payment transactions grow, compliance and governance have to go hand in hand. Regulators have efficiently balanced innovation with risk management while they allow people to innovate,” Mathur stressed.
