In a recent interaction with the media, Reserve Bank of India (RBI) Governor Shaktikanta Das sought to clarify the central bank’s position on its recent actions against Paytm Payments Bank (PPBL), emphasizing that the regulatory body harbors no ill will towards the fintech sector at large. His comments came amidst swirling speculations and concerns within the fintech industry following the central bank’s directives aimed at PPBL over non-compliance issues.
The RBI’s move against Paytm Payments Bank has stirred significant discourse in the financial and technology ecosystems. Das reiterated that the action was not indicative of the RBI’s stance on fintech companies but was solely a response to what he termed as “consistent non-compliance” by PPBL. “RBI is and remains fully supportive of Fintech…RBI is all for Fintech to grow,” Das stated, underlining the central bank’s encouraging approach towards innovation in the financial technology sector. He further highlighted the RBI’s initiatives like the introduction of the Sandbox environment, designed for testing new financial tools and technologies, showcasing the central bank’s efforts to nurture innovation while ensuring compliance and stability in the financial system.
Providing an analogy to underscore his message, he mentioned, “One may own and drive a Ferrari but still has to obey the traffic rules to avoid accidents.” This reflects the RBI’s standpoint that while it encourages advancements and the efficient use of technology in financial services, adherence to regulatory compliance and norms remains non-negotiable.
Addressing concerns regarding the deadlines imposed on PPBL for linking its wallets to other banks, Governor Das confirmed that March 15 has been set as the deadline, with no plans for an extension. He reassured that the timeline provided is sufficient for compliance. According to the governor, a significant majority, approximately 80-85%, of Paytm wallets are already linked to other banks. The remaining 15% have been urged to expedite their compliance to avoid disruptions in their services.
Moreover, questions about the future of the Paytm payment app license, which is under the purview of the National Payments Corporation of India (NPCI), were raised. Governor Das clarified that the RBI has conveyed to NPCI that it has no objections to the continuation of the Paytm payment app, emphasizing that the central bank’s actions were specific to Paytm Payments Bank, not the app itself. He mentioned that NPCI is expected to make a decision soon after completing its due diligence process.
This statement from the RBI governor comes at a pivotal moment as it assuages the fintech sector, affirming the central bank’s commitment to fostering growth and innovation while ensuring that the regulatory framework is upheld. The clarification also signals the RBI’s intent to differentiate between actions taken against individual entities for non-compliance and its broader perspective on the fintech industry.
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