RBI Governor’s Response to Paytm’s Actions: ‘Time Given, Yet No Improvement’; We’ll Address Public Queries Too
Following the RBI’s actions against Paytm, RBI Governor Shaktikanta Das stated that in recent days, numerous questions have arisen from the public. He acknowledged these concerns and assured that answers will be provided in the forthcoming FAQs. Governor Das emphasized that entities like Paytm must adhere to regulations, and compliance must be ensured. He stressed that if any institution abides by the rules, there should be no cause for concern, highlighting the responsibility of regulatory authorities in such matters.
RBI’s Initiative for Depositors’ Protection
In furthering the safeguarding of depositors’ interests, the RBI’s actions have been directed towards ensuring stability and protection within the systemic framework. Governor Shaktikanta Das reiterated that all regulatory measures are aimed at maintaining the integrity of operations and preserving the interests of depositors. He emphasized the non-negotiable commitment to the protection of depositors’ rights. The matter concerning Paytm is specific to the institution and does not pose systemic concerns. Overall, there is no cause for apprehension within the entire system.
Provide Institutions Time for Remedial Measures
Deputy Governor Swaminathan J.’s assertion underscores the necessity for institutions to undertake corrective actions proactively. He highlighted that regulatory measures were initiated against Paytm due to persistent non-compliance. Such actions are typically taken after months or even years of observation, during which deficiencies are identified, and institutions are given time for remedial measures. This approach reflects a commitment to showcasing shortcomings and affording institutions the opportunity to implement corrective measures.
Highlights of RBI’s Directive Regarding Paytm
Following the events of February 29, Paytm Payments Bank will no longer accept deposits into accounts. Customers will be unable to deposit funds into wallets, prepaid services, Fastag, and other services provided by the bank. Interest, cashback, and refunds will also not be credited to accounts during this period.
However, there are no restrictions on withdrawing or using funds from customers’ savings accounts, current accounts, prepaid instruments, Fastag, National Common Mobility Card, and similar services. The balance will remain accessible for usage until further notice.
Aside from the mentioned services, Paytm Payments Bank will not be permitted to provide any banking services after February 29, 2024. Additionally, UPI services will also cease after February 29.
The nodal accounts of One97 Communications and Paytm Payments Services will be closed by February 29, 2024.
