Union minister Rajeev Chandrasekhar on Sunday said that the Reserve Bank of India’s action against Paytm Payments Bank has drawn the attention of fintech firms to the importance of complying with laws.
The minister in an interview to news agency PTI said that the Paytm Payments Bank issue is a case involving a ‘hard-charging’ and aggressive entrepreneur failed to realise the need for regulatory compliance. He added that no company can get away if it is non-compliant with the law, a reason given by the central bank on its action against the payment gateway.
The RBI has granted Paytm Payments Bank an extension till March 15 to stop deposits. “No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after March 15, 2024 (extended from the earlier stipulated timeline of February 29, 2024), other than any interest, cashbacks, sweep in from partner banks or refunds which may be credited anytime,” the RBI said in its order.
ALSO READ: Paytm Payments Bank crisis: RBI issues 30 FAQs after crackdown
“Any company, be it from India or abroad, big or small, has to abide by the law of the land,” Chandrasekhar said.
“And this notion that RBI… the regulator’s action against Paytm Payments Bank has rattled fintech is… I don’t think that’s a correct characterisation. I think it has drawn the attention of fintech entrepreneurs, to the fact that you also have to know how to comply with the law,” he added.
“Regulatory compliance is not an optional thing for any country in the world, certainly not in India, and it is something that they (entrepreneurs) should pay more attention to,” he said.
The minister added that entrepreneurs typically tend to get so sharply focused on what they’re building, that at times, they may lose sight of rules that have been laid down by regulators.
He said entrepreneurs and startups have a ‘genetic flaw’ that they get focused on what they’re building and sometimes forget to understand there are some rules that have been laid down by the regulators.