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The Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday said there would be no review of action taken against Paytm Payments Bank. He also said that a set of frequently asked questions (FAQs) dealing with consumer interest issues will be released this week.
“Let me be very clear that there is no review of the action taken against Paytm Payments Bank. The FAQ will deal with customer interest issues,” Das said while talking to the media after a meeting of the RBI’s central board of directors addressed by Finance Minister Nirmala Sitharaman.
“FAQ will have a set of clarifications related to customers of PPBL, as our priority is that the customers should not be inconvenienced. Customer interest and depositor interest is uppermost for us,” he said. In a major action against Paytm Payments Bank (PPBL), RBI had, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags, and other instruments after February 29.
“When a decision is taken, it is taken after much consideration and deliberation. Decisions are not taken in a casual manner. They are taken in a serious manner,” Das further added. Asked if the deadline of February 29 would be extended, Das replied, “Wait for the FAQ.”
Speaking broadly about fintechs, the governor said the RBI has always been supportive of the sector and wants it to grow as much as possible. “RBI promotes and will continue to promote fintech. But customer interest and financial stability are of prime importance,” he said.
While announcing the action against PPBL, the RBI said the direction follows persistent non-compliances and continued material supervisory concerns.
- Also read: Paytm puts its wallet biz on the block
Earlier on March 11, 2022, the RBI barred PPBL from onboarding new customers with immediate effect. In its latest action, RBI has asked the Paytm Payments Bank not to take deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards, among others, after February 29, 2024.
However, the central bank has allowed credit of interest, cashbacks, or refunds even beyond February 29. Further, withdrawal or utilisation of balances by PPBL customers from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards, are permitted without any restrictions, up to their available balance.
RBI also directed termination of the ‘nodal accounts’ of One97 Communications Ltd. One97 Communications, which owns the Paytm brand, holds a 49 per cent stake in Paytm Payments Bank Ltd but classifies it as an associate of the company and not as a subsidiary.
RBI Board Meeting
Earlier in the day, Finance Minister Nirmala Sitharaman addressed the RBI’s central board of directors. During the meeting, the Finance Minister highlighted the key thrust areas in the interim Union Budget 2024-25 and the expectations from the financial sector. The directors complimented the Finance Minister on the Budget and shared their views.
The Union Finance Minister was accompanied by two Ministers of State for Finance, Pankaj Chaudhary and Bhagwat Kishanrao Karad, and other senior officials of the ministry, including Finance Secretary TV Somanathan and Financial Services Secretary Vivek Joshi.
The Board also reviewed the global and domestic economic situation and outlook, including the challenges posed by geopolitical developments and global financial market volatility.
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