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Fintechs in the country must take laws seriously and should adhere to rules and regulations set by the regulator, a top Finance Ministry official said on Monday.
“Top fintech players like Paytm should adhere to rules and regulations set by regulator. I would advise fintech industry to follow regulations, take laws seriously,” Vivek Joshi, Secretary, Department of Financial Services in Finance Ministry told businessline here.
Fintechs in the country have been making giant strides on the technology front and been successful in scaling their businesses, but they should also be focused on regulatory compliances, according to Joshi.
Joshi’s remarks are significant as it comes at a time when Paytm Payments Bank, an associate of One97 Communication (which owns brand Paytm) is facing a crisis and amidst speculation that the Reserve Bank of India is weighing the removal of licence in the wake of the central bank finding several lapses including regulatory compliance issues.
RBI has already advised Paytm Payments Bank to halt much of its business and given time till February 29 post which the payments bank has been barred from taking deposits or allowing top ups.
The ongoing crisis on Paytm Payments Bank has adversely impacted the share prices of One 97 Communications, whose shares fell for the third straight day, hitting lower circuit of 10 per cent and reached an all time low of ₹438.35 at BSE on Monday. Paytm shares have dropped over 40 per cent in last three days.
Paytm shares had nosedived 20 per cent on last Thursday as well as Friday.
Asked if the Government will, in the coming days, be looking to bring any safeguard mechanisms to protect the interests of retail investors in listed fintechs, Joshi replied in the negative. He said that market regulator SEBI will be the right authority to look at such aspects.
Paytm shares continued to tumble in bourses despite One97 Communications statement on Sunday that the company and its founder Vijay Shekhar Sharma aren’t under investigation by the country’s anti-money laundering authority (Enforcement Directorate).
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