Paytm Payments Bank Action: RBI Curbs Proportionate To Gravity Of Situation, Says Governor Das
The Reserve Bank of India's restrictions on regulated entities are always proportionate to the gravity of the situation, said Governor Shaktikanta Das, responding to queries on Paytm Payments Bank issue.
It was a supervisory action on a regulated entity for "persistent" non-compliance, Deputy Governor Swaminanthan Janakiraman said in the press conference after the monetary policy. Any supervisory action is usually preceded by months of bilateral conversations as it is incumbent on the regulator to protect consumer interest at the end of the day, he said.
The RBI has barred Paytm Payments Bank from taking fresh deposits as it imposed stringent curbs citing non-compliance of know-your-customer norms.
Commenting on the general ecosystem, Das said there is nothing to worry about from a system point of view. "We have significantly deepened supervisory systems, approach and methods. The emphasis is always on bilateral engagement with regulated entity."
The RBI is always focused on nudging a regulated entity to take remedial action when needed, he said. It also gives sufficient time for taking corrective action, Das said. Only when "constructive engagement doesn't work" that the RBI goes for imposing business restrictions, he said.
Since RBI has received various questions on Paytm, it would also issue FAQs next week on the central bank's supervisory actions against payments firms.
Swaminathan told reporters that the RBI has various tools available and it makes its own assessment while using them in every situation. "A one-size-fits-all action may not work; we deploy tools based on certain conditions."
There is still time for customers to access services of Paytm and each bank has to take their own business decisions with regards to partnership with the company, he said. "We keep customer at the centre of what needs to be done."
The regulator emphasised that it won't be appropriate to share granular details on the Paytm issue. The RBI will continue to support innovation and technology in the financial sector, Das said.
