RBI not against Fintech Companies, Paytm order was against Regulated Entity

Recently, the Reserve Bank of India (RBI) had ordered the banking unit of payment services company Paytm to shut down operations due to compliance violations. This had increased the apprehensions of the fintech industry. RBI has given assurances regarding this industry.

RBI Governor, Shaktikanta Das said that the action taken against Paytm Payments Bank (PPBL) was against a regulated entity. He said, “This action was taken against a regulated entity. It was not against any fintech company. I do not understand why it is being believed that RBI has taken action against a fintech company. In this case the action was against the payments bank.” In an interview to a business news channel, he said that PBLEdit The March 15 deadline is enough for customers to shift their accounts and wallets to other banks.

He said, “If you have a payment app, then link it with another bank by March 15. If NPCI decides to allow Paytm, then we have no objection. Our action was against the bank, not the app.” Earlier this month, the Financial Intelligence Unit (FIU) imposed a penalty of more than Rs 5 crore on PPBL. The reason for this is the violations in reporting illegal money sent through Paytm Payments Bank accounts.

The regulator, which comes under the finance ministry, has imposed a ban on the use of online gambling after receiving information from law enforcement agencies about some entities being involved in illegal activities, including online gambling, and sending the proceeds through banks. FIU had started investigating Paytm Payments Bank. In this regard, the Finance Ministry had said in a statement, “The money received from illegal activities was sent by these entities through their accounts in Paytm Payments Bank.” The FIU order said that Paytm Payments Bank did not report the suspicious transactions and due diligence of these accounts was not done. Earlier, Paytm had said that it has been given notices to provide information and clarification from authorities including the Enforcement Directorate.