LI Network
Published on: February 9, 2024 at 15:59 IST
Reserve Bank of India (RBI) Governor Shaktikanta Das emphasized that all measures taken by the central bank, including specific restrictions imposed on Paytm’s associate bank, were undertaken in the best interest of the public.
During a post-monetary policy press conference, Governor Das addressed a series of questions from reporters, stating, “All our actions, being a responsible regulator and supervisor, are in the best interest of systemic stability and protection of depositors or customers’ interest. These aspects cannot be compromised. Individual entities should be mindful of such aspects for their long-term success.”
Governor Das clarified that his remarks were general and not solely specific to Paytm. He elaborated on the RBI’s approach as a regulator and how it engages with regulated entities when necessary.
“We give sufficient time to every regulated entity supervised by the RBI to comply with the regulatory requirements, and sometimes it may even look more than sufficient time. We are a responsible regulator; we are a responsible supervisor. If everything had been complied, I am talking in a general sense, why should we act? After all, we have a responsibility; it’s a responsible institution,” Das explained.
“We are completely focused on nudging the regulated entity to take corrective actions… And sufficient time is given for undertaking such corrective action. When such constructive engagement, which we undertake, does not work, or when the regulated entity does not take effective action, we go for imposing supervisory or business restrictions.”
Governor Das reiterated that the recent action against Paytm should be viewed as a measure taken for the greater interest of customers. He emphasized that the restrictions imposed were proportionate to the gravity of the situation.
On January 31, the RBI announced various restrictions on Paytm Payments Bank Ltd, citing persistent non-compliances and material supervisory concerns based on audit reports.
Governor Das stated that the RBI received queries and clarifications and will issue a list of FAQs next week on this issue. Regarding the broader fintech space, Das assured that the RBI will continue to encourage and support the financial system, dispelling any doubts to the contrary.
Deputy Governor Swaminathan, commenting on the Paytm matter, highlighted that this supervisory action resulted from persistent non-compliance.
He noted that such actions follow months, and at times years, of bilateral engagement, aiming to address deficiencies and provide adequate time for corrective actions. Swaminathan affirmed that as a regulator, protecting the interest of the ultimate consumer and ensuring financial system stability are paramount considerations.
When asked about future steps, the deputy governor indicated that suitable measures would be taken to minimize customer inconvenience based on the feedback received.
