The recent turmoil surrounding Paytm, a prominent player in the digital payments realm, has caught the attention of many.
With Paytm Payments Bank facing an impending ban on certain services from February 29, the Reserve Bank of India (RBI) has stepped forward to shed light on the rationale behind this decision.
Lack of Compliance: RBI’s Stance
In a statement issued on Thursday, the RBI cited non-compliance with regulatory guidelines as the primary reason for the ban imposed on Paytm Payments Bank.
Despite repeated requests, Paytm allegedly failed to adhere to the regulatory framework, prompting the central bank to take strict action against the financial technology company.
However, RBI Governor Shaktikanta Das assured that the lack of compliance by Paytm does not pose any systemic risk.
Clarification Amid Speculation
Amidst speculations of potential restrictions on other similar apps, Governor Das emphasized that there is currently no cause for concern regarding the system.
The regulatory measures taken against Paytm specifically target the institution and its payments bank.
Deputy Governor Swaminathan J elaborated that the action against Paytm Payments Bank, initiated on January 31, stems from persistent non-compliance with rules.
As part of this action, RBI has prohibited Paytm from onboarding new customers and mandated the cessation of services related to deposits, prepaid products, and e-wallets after February 29.
Future Implications and Transparency
While certain services of Paytm Payments Bank will be discontinued from March 1, the Reserve Bank plans to release a comprehensive FAQ next week to address the questions and concerns of stakeholders.
However, Governor Das refrained from disclosing specific details regarding the reasons behind the regulatory action.
As the situation unfolds, stakeholders await further clarity from regulatory authorities regarding the implications and potential resolutions for the ongoing crisis surrounding Paytm Payments Bank.