Will ensure Paytm-related customer inconvenience is minimised: RBI’s Swaminathan

The Reserve Bank of India has received feedback from various stakeholders regarding the curbs imposed on Paytm Payments Bank, and will take steps to ensure that any inconvenience is minimised, said Deputy Governor Swaminathan J.

“There’s still time that is provided for customers to continue to access the services. So, during this period, we will see what else needs to be done, and we keep the customer in the centre of what needs to be done; so, we will take appropriate steps,” he said at the post-policy meet.

On whether the central bank would be okay with the parent company One 97 partnering with other lenders to offer non-payment bank-related services, Swaminathan said it’s a business decision, and each bank will have to carry out their own due diligence and take a call.

“This particular action is against the payments bank and not to be confused with the payments app,” he said, adding that the Paytm application has not been impacted by this action.

A Paytm spokesperson on Thursday said: “We assure our users and merchant partners that the Paytm app remains fully operational, and our services are unaffected. We are accelerating our partnerships with banks to offer uninterrupted services. We assure our merchant partners that Paytm QR, Soundbox and card machines will continue to work as always.” To further address customer and merchant queries, the RBI will issue a FAQ on the payments ecosystem in the coming week.

Supervisory action

Commenting for the first time of the restrictions imposed on the payments bank, Swaminathan said it is a “supervisory action on a regulated entity for persistent non-compliance”. Such actions are invariably preceded by months and, at times, years of bilateral engagement, where the RBI not only points out the deficiencies, but also provides more than adequate time for corrective action.

“As a regulator, it’s incumbent upon us to protect the interest of the ultimate consumer and, thereb, protect the stability of the financial system. So, these actions have to be seen in that particular context,” he said.

Governor Shaktikanta Das added that there is no systemic concern at the moment, and the action has been taken only against a specific entity.

“We give sufficient time to every regulated entity to comply with regulatory requirements. Sometimes, it may even look like more than sufficient time. We are a responsible regulator and supervisor, if everything had been complied with, why should we act?,” he said.

On the RBI’s decision to not appoint a member on the board of Paytm or supersede the board, Swaminathan said the central bank has “various tools in the kitty”, and it’s not necessary that every tool will be deployed in every situation. “We make our own assessment of the scale and proportion of the issue, as well as the tool that we will have to use at different points in time. So, a ‘one-size-fits-all’ kind of solution may not work in such situations,” he added.

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