 "PPBL crisis: We give enough time to comply with rules, says RBI Governor")
The Reserve Bank of India (RBI) gives enough time to a regulated entity to comply with the rules, Governor Shaktikanta Das said in a post-Monetary Policy Committee (MPC) press conference on Thursday.
Deputy Governor Swaminathan J said that the action on Paytm Payments Bank was taken due to "persistent non-compliance". He said that there had been a bilateral engagement between the regulator and the fintech company for months, and RBI had not only pointed out deficiencies but also given enough time to take corrective measures.
Das also said that the issue with Paytm Payments Bank was not of regulations but of compliance. The RBI had earlier this month imposed restrictions on Paytm Payments Bank from accepting new deposits from February 29.
Das also said that the issue with Paytm Payments Bank was not of regulations but of compliance. The RBI had earlier this month imposed restrictions on Paytm Payments Bank from accepting new deposits from February 29.
Governor Das said that as a principle, the emphasis of RBI is always on bilateral engagement with a Regulated Entity (RE) with a focus on nudging them to take corrective action.
"When such engagement does not work, or a corrective action is not taken, we go for supervisory or business restrictions," he said.
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Das, on Thursday, said that the restrictions imposed "are always proportionate to the gravity of the situation", adding that the main focus is on the protection of depositors and the economic stability.
At the conference, Das also said that in the last few days, the RBI has received many queries from various quarters, including media and common people.
"We have noted all the queries and clarifications, and based on that, we will issue an FAQ next week to address them," he said.
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Swaminathan added, "Just to clarify, the action is against Paytm Payments Bank, not against the Paytm app. The app is not impacted by our action" adding that partnering with Paytm Payments Bank is a business decision of banks.
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On the health of the overall financial system, Das said that there is no worry about the system at the moment. "The RBI is and will continue to encourage and support innovation and technology in the financial sector," Das added.
"We assure our users and merchant partners that the Paytm app remains fully operational, and our services are unaffected. Paytm continues to lead in mobile payments innovation and we are accelerating our partnerships with banks to offer uninterrupted services," the spokesperson of Paytm said after the press conference.
"We assure our merchant partners that Paytm QR, Soundbox and card machines will continue to work as always. Our dedication to providing seamless payment solutions and promoting financial inclusion across India remains as strong as ever."