Financial Services Secretary Vivek Joshi emphasized that the Reserve Bank of India (RBI) is responsible for addressing the issues surrounding Paytm, indicating that the government is not involved in the matter at this stage. He reassured that Paytm Payments Bank Ltd (PPBL) is a relatively small financial entity and that there are no immediate concerns regarding systemic stability.
Joshi clarified that the recent actions taken by the RBI against PPBL, including restrictions on offering certain services and onboarding new customers, are regulatory measures aimed at safeguarding consumer interests and the overall economy. He emphasized that the government trusts the RBI's judgment in this regard.
Regarding foreign investment in Paytm's payment aggregator subsidiary, Joshi mentioned that there is an ongoing review process for permission sought for investment from China. He indicated that this process involves multiple ministries and is currently under consideration.
Responding to concerns about financial stability arising from RBI's actions against PPBL, Joshi reiterated that the bank is relatively small and that there are no significant systemic stability concerns. He noted that customers with accounts in PPBL would need to shift their accounts, as the bank itself will not migrate them.
In light of the regulatory actions, Paytm Founder Vijay Shekhar Sharma reportedly met Finance Minister Nirmala Sitharaman, where it was reiterated to him that the issues with PPBL must be addressed with the RBI directly.
Allegations have surfaced regarding non-compliance with KYC norms and suspicious activities related to multiple accounts and large transactions. An analyst pointed out concerns about a high number of dormant accounts potentially being used for illicit activities, highlighting irregularities in KYC compliance and exposing customers to risks.
Overall, Joshi's statements reflect a stance of regulatory vigilance and trust in the RBI's oversight of financial institutions like PPBL, while acknowledging the need to address compliance issues and ensure consumer protection.
(With Agency Inputs)