Sebi and RBI take away the punch bowl

Unenviable position: If regulators act ahead, they are criticised as the action is at odds with some people's financial interests; if they don't act, they are blamed for being lax when disaster hits

In the past few weeks, India’s top two financial regulators have flexed their muscles to teach market participants some basic lessons in prudence and regulatory compliance. First, the Reserve Bank of India (RBI) imposed business restrictions on Paytm Payments Bank for allegedly violating norms repeatedly over several years. Then, the central bank debarred it from accepting fresh deposits and credit transactions after March 15, which could effectively mean curtains for the bank. On March 4, the RBI imposed an embargo on IIFL Finance’s gold loan business and the next day it banned loans against shares and the IPO (initial public