Why did the Reserve Bank take action against PayTm? RBI Governor told

Why did the Reserve Bank take action against PayTm?  RBI Governor told

RBI Governor Shaktikanta Das on action over PayTm: reserve Bank of India Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday that there is no systemic concern in the Paytm case and the action against the payments bank was due to non-compliance with the rules.

Das said that RBI is a responsible regulator. He asked in a questioning tone that if the financial institutions under the purview of RBI fulfill all the requirements, then what is the need for the central bank to take action against any entity.

He said, RBI works with institutions on a bilateral basis. Encourages them to comply with the rules by giving them adequate time. Action is taken at the monitoring level only when necessary steps are not taken by the concerned unit.

When the regulated entity (banks and NBFCs) does not take effective action, we take steps to impose restrictions on functioning, Das said. He said that the action has been taken keeping in mind the stability at the system level or the protection of the interests of depositors or customers.

Governor Das reiterated the central bank’s commitment to promoting innovation in the financial sector. He said that there should be no doubt in this. He said that RBI has received response from people on a wide scale. The central bank will issue FAQs (Frequently Asked Questions) next week to address concerns.

RBI Deputy Governor Swaminathan J said that the action against financial technology (fintech) has been taken due to persistent non-compliance with the rules.

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