SEBI Chairman and Chairperson Madhabi Puri Buch assured Tuesday that the regulatory body would ensure no Paytm-like situation impacts the stock markets. She explained that Paytm's blight was restricted to its own banking system, only because a KRA (Know-Your-Customer Registration Agency) system had yet to be set up.
According to Buch, all of the problems that surfaced in Paytm were within its own framework; these problems had not contaminated the banks. But she had warned that if Paytm was allowed into the market without bringing it under KRA oversight, there could be a risk of contamination.
"Our KRAs are very important in terms of validation of the processes, and ensuring that no rogue element can cause any disruption in the market," Buch said at an event at the National Stock Exchange. Buch added that oversight from KRA would be important for maintaining the integrity of the market.
He further added that in the absence of such checking, some malicious players can undermine the entire system. Earlier this year, the Reserve Bank of India had imposed restrictions on Paytm Payments Bank due to certain lapses, including those related to the KYC process.
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