RBI action on Paytm Bank
The RBI, through its actions, has sounded the death knell of Paytm Bank. The parent company, One97 Communications Ltd, is now struggling to resolve the issue of opening nodal accounts to ensure continuity of services as none is coming forward in view of inherent challenges the move entails. Apart from several deviations identified by the RBI, the one related to non-adherence to KYC norms is posing a huge challenge to banks aspiring to take over the merchants enjoying several of the services offered by Paytm. What defies logic is the request of the banks to allow them to on-board merchants on ‘as-is-where-is basis. Questions arise if RBI pays heed to such a request, it could have very well allowed Paytm to continue with its services after rectifying KYC, technology and cyber security related deviations and on submission of a compliance report. When several banks that had indulged in credit frauds could be let off with minor penalties facilitating the takeover by other institutions, the RBI could have handled the Paytm issue in a better way.
Apropos ‘UK FTA: Proceed with care’ (February 12), indeed an FTA must be a win-win for both the countries involved through amicable negotiations. When a partner country in a proposed FTA emphasises its own agendas in the negotiation, the other country must take care and weigh the pros and cons before concluding the deal. The UK FTA has been in the works from 2022 and the BJP Government has done well in not hurrying to seal the deal. Let the deal to struck after the election and discussions with domestic stakeholders.
Taxing for the salaried
It is interesting to learn that there is a greater degree of direct tax compliance these days. But if we see the situation from the lens of the salaried class, especially in the last quarter of a financial year, it is really pathetic. Huge tax deductions at source make them even indebted to maintain the same standard of living. The government may be committed to reducing inequalities of income and wealth through its direct taxation policies. But it should not worsen the economic situation of the so-called middle class.
Evergreening of loans
This is with reference to ‘Forensic audit opened into Bandhan Bank’s evergreening of loans’ (February 12). Though the ‘evergreening’ of loans is not unknown in banks, it was not rampant and mostly sporadic. But the “potential inflation in the portfolio through fictitious customers” is rare and more harmful to the banking system. The National Credit Guarantee Trust Company should examine the accounts of the bank in the scanner and quickly bring out the facts, so that punitive action may be taken, if necessary. It will also have a salutary effect on other banks and dissuade them from indulging in such unhealthy practices.