Deputy Governor states RBI sanctions Paytm Payments Bank for non-compliance
- ByStartupStory | February 8, 2024
During a press conference following the Monetary Policy Committee meeting, Deputy Governor Swaminathan J revealed that the Reserve Bank of India (RBI) has imposed sanctions on Paytm Payments Bank Ltd (PPBL) due to “persistent non-compliance.” Swaminathan emphasized, “This is supervisory action on a regulated entity for persistent non-compliance.” He further explained, “Such actions are invariably preceded by months and at times years of bilateral engagement where we not only point out deficiencies but provide more than adequate time to take corrective action.”
As a result of the sanctions, PPBL has been prohibited by the central bank from accepting deposits or top-ups in any customer accounts, prepaid instruments, wallets, and FASTags after February 29. Bloomberg reported that the RBI may take further action after this deadline, and customers of PPBL will be unable to replenish their savings accounts or the widely-used digital payment wallet.
Addressing the potential transition of merchants from PPBL to different banks, the deputy governor stated, “In terms of what other banks will do is a business decision; they have got to carry out due diligence as per their board approved policies, and I am sure that they will carry out that.”
RBI Governor Shaktikanta Das emphasized the regulator’s approach to compliance, stating, “We give sufficient time to every regulated entity to comply with the regulatory requirements, and sometimes it may look (like) more than sufficient time.” Das further asserted, “We are a responsible regulator … If everything had been complied, I am talking about in a general sense, why should we act?”
According to reports, the RBI has declined to grant the concessions requested by Paytm’s founder and CEO Vijay Shekhar Sharma during a meeting regarding issues at PPBL.
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