RBI restrictions on Paytm Payments Bank due to repeated non-compliance
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New Delhi: A central bank official stated on Thursday that the Reserve Bank of India's (RBI) clampdown on Paytm Payments Bank's activity was the result of chronic noncompliance with the regulator's regulations. At a news conference following the central bank's monetary policy review, RBI deputy governor Swaminathan J stated that the regulatory actions were taken after providing the firm adequate time to comply.
The RBI last week ordered Paytm Payments Bank to halt taking new deposits in its accounts or popular digital wallets beginning in March, citing supervisory concerns and rule violations, Reuters reported. At the same briefing, RBI governor Shaktikanta Das said, “Sufficient time is given to non-compliant entities but action is taken when bilateral talks don’t yield action.”
“When such constructive engagement does not work or when the regulated entity doesn’t take effective action, we go for imposing supervisory or business restrictions,” Das said.
In the context of the Paytm ruling, Das stated that the central bank will provide explanations as needed next week. Swaminathan stated that "suitable steps" will be taken to minimise any customer disruption. He did not indicate what actions the central bank intends to take.
Paytm shares fell by 10% on the National Stock Exchange following the deputy governor's comments. The shares were last trading down around 9%.