The Reserve Bank of India on Thursday said the action against Paytm was taken due to the fintech firm’s ‘persisted non-compliance’.
“We give sufficient time to every entity to comply and sometimes more than sufficient time to the entities for compliance. If they would comply, why would a regulator like us would have to take action?” RBI governor Shaktikanta Das said in the briefing after the monetary policy committee address.
“This is a supervisory action on a regulated entity for persistent non-compliance. The central bank will take suitable steps as warranted going ahead,” deputy governor Swaminathan J said.
“RBI will be issuing a set of FAQs (frequently asked questions) next week to assuage public concerns following the Paytm action,” Das said.
Last week, the central bank had barred Paytm Payments Bank from accepting new deposits from February 29. “No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime,” the central bank had said.
“Withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. are to be permitted without any restrictions, up to their available balance,” the RBI had added.
Paytm’s founder and chief executive officer Vijay Shekhar Sharma had met both the RBI and finance minister Nirmala Sitharaman. According to reports, the RBI had refused to grant concessions to the payment gateway.
The company will have to transfer accounts to third party banks after February 29 to ensure that the digital payments function smoothly.
According to a Mint report, the Paytm founder was told by Sitharaman that action against his company was a regulatory process and the government cannot help the company with.