Financial Services Secretary Vivek Joshi stated on Wednesday that the difficulty regarding Paytm is throughout the jurisdiction of the Reserve Bank of India (RBI), emphasising that the government’s involvement is at present not warranted.
He reassured that Paytm Payments Bank Ltd (PPBL) is a comparatively small monetary entity, assuaging issues about systemic stability.
Amidst regulatory actions taken by the RBI towards PPBL, together with the prohibition of sure companies and the cessation of latest buyer onboarding efficient February 29, Joshi clarified that these actions are underneath the purview of the regulator. He expressed confidence that the RBI’s measures had been taken within the curiosity of shoppers and the broader financial system.
“It is action taken by the regulator. They regulate the banks. The government has had nothing to do until now when it comes to the actions taken against Paytm. And we believe that RBI must have taken the action in the overall interest of the consumer and the economy,” Joshi stated.
Regarding overseas direct funding (FDI) in Paytm’s cost aggregator subsidiary, Joshi talked about that permission has been looked for funding from China. He indicated that the appliance is at present underneath evaluate as a part of an inter-ministerial course of.
Addressing issues about monetary stability due to the RBI’s actions towards PPBL, Joshi reiterated that the financial institution’s measurement is comparatively small, mitigating systemic dangers. He famous that clients with accounts within the funds financial institution would want to switch their accounts, emphasising that the migration course of lies with the shoppers themselves.
“The customers who have an account in the payments bank, they will have to shift their account. From what I understand, it is not the bank that will migrate the accounts. The customers have to do it,” he added.
Paytm Founder Vijay Shekhar Sharma met Finance Minister Nirmala Sitharaman on Tuesday, the place it was reiterated that Paytm should tackle issues with the RBI instantly.
Allegations have surfaced concerning PPBL’s compliance points, together with quite a few non-KYC-compliant accounts and situations of a single PAN getting used for a number of accounts. Additionally, issues have been raised about transactions exceeding regulatory limits, elevating cash laundering issues.
An analyst highlighted that PPBL has roughly 35 crore e-wallets, with a good portion being dormant. The analyst raised issues about irregularities in KYC compliance and the potential dangers posed to clients, depositors, and pockets holders.
Overall, the state of affairs underscores the significance of regulatory compliance and threat administration throughout the monetary sector, notably within the context of rising digital cost platforms.
(With PTI inputs)
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