RBI Imposes Restrictions on Paytm Payments Bank

RBI Imposes Restrictions on Paytm Payments Bank

VoM News Desk | February 8, 2024 | 02:41 PM IST | Breaking News | Follow on Google News

RBI Imposes Restrictions on Paytm Payments Bank/PTI

RBI Imposes Restrictions on Paytm Payments Bank

The Reserve Bank of India (RBI) took stringent action against Paytm Payments Bank due to persistent non-compliance with regulatory norms, leading to restrictions on its business activities. Top RBI officials emphasized the need to protect consumers and ensure systemic stability through these measures.

Supervisory Action: RBI Deputy Governor Addresses Paytm Crisis

RBI Deputy Governor Swaminathan J revealed that the supervisory action was a consequence of prolonged non-compliance, highlighting months or even years of engagement where deficiencies were identified. The central bank, he stated, prioritizes consumer protection and systemic stability, underlining that such critical aspects cannot be compromised.

Governor’s Clarification: Paytm Issue Isolated, System Not at Risk

RBI Governor Shaktikanta Das clarified that the issue with Paytm was specific to the institution and did not pose a threat to the entire financial system. He emphasized that it was not a regulatory deficiency but an issue of compliance with established parameters, further stating that the regulatory framework remains robust.

Das assured that the central bank would release a set of frequently asked questions (FAQs) next week to address concerns arising from the Paytm Payments Bank situation. The move aims to provide clarity and transparency regarding the actions taken.

App Unaffected: RBI Action Targets Paytm Payments Bank, Not Paytm App

Swaminathan clarified that the regulatory action was directed solely at Paytm Payments Bank and not the broader Paytm app. The app remains unaffected by the RBI’s measures. Last week, the RBI instructed Paytm Payments Bank to cease accepting new deposits starting March due to supervisory concerns and non-compliance with regulations, leading to a 10% lower circuit lock on Paytm’s share price at ₹447.10 apiece on the BSE.

VoM News Desk

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