Why RBI Taken Action Against Paytm Payments Bank! Check What Governor Shaktikanta Das Says
Why RBI Taken Action Against Paytm Payments Bank? Check What Governor Shaktikanta Das Says
Governor Das emphasized the RBI’s reliance on bilateral engagement with regulated entities, focusing on nudging them towards corrective actions.
RBI MPC Meet was today, on February 8.
Governor Shaktikanta Das shed light on the action taken against Paytm’s bank.
There is no cause for concern for other fintech firms.
New Delhi: Today, February 8, 2024 (Thursday), during the MPC Meet, Reserve Bank of India (RBI) Governor Shaktikanta Das shed light on the regulatory action taken against Paytm Payments Bank, stating that ample time was provided for corrective measures before the intervention.
Supervisory Approach
Governor Das emphasized the RBI’s reliance on bilateral engagement with regulated entities, focusing on nudging them towards corrective actions. He highlighted that the central bank intervenes only when such engagements fail to yield results or when the regulated entity fails to take effective action.
Proportionate Measures
Das reiterated that any restrictions imposed by the RBI are proportionate to the seriousness of the situation, stressing that regulatory actions are taken only when necessary. He emphasized the importance of compliance with regulations and reaffirmed the RBI’s commitment to responsible regulation.
While refraining from divulging specific details regarding the action against Paytm Payments Bank, Das mentioned that the RBI would issue a FAQ document in the coming week to address related queries.
No Cause Of Concern To Fintech Firms
Governor Das assured other fintech firms that there is no cause for concern amid the ongoing situation with Paytm. He reiterated the RBI’s support for innovation and technology in the financial sector, emphasizing its commitment to promoting fintechs.
Regulatory Action Against Paytm
On January 31, the RBI initiated strict regulatory action against Paytm Payments Bank, instructing it to suspend certain key services from March 1. This development has resulted in a crisis for Paytm, which relies heavily on the payments bank for various operations such as wallet services and FASTag.ZN
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