Governor of the Reserve Bank of India Shaktikanta Das said on Monday that the decision to take action against Paytm Payments Bank Ltd. (PPBL) was made following a thorough evaluation of the lender's operations, ruling out any possibility of a review.
The RBI ordered Paytm Payments Bank (PPBL) on January 31 to cease taking deposits or top-ups in any client accounts, wallets, FASTTags, or other instruments after February 29 as part of a significant action against the bank.
"Let me be absolutely clear: this (PPBL) decision is not currently being reviewed. At a news conference held following the 606th meeting of the Reserve Bank of India's Central Board of Directors. If you are expecting a review of the decision, let me very clearly say there is (going to be) no review of the decision," Das stated.
Nirmala Sitharaman, the finance minister, spoke to the group. The governor said any decision against entities regulated by the RBI is taken after a comprehensive assessment.
Das emphasized RBI's support for the fintech industry while reiterating the organization's commitment to upholding financial stability and safeguarding customers' interests. This week, the central bank is anticipated to release a series of FAQs (Frequently Asked Questions) regarding the Paytm issue.
The RBI had stated that the direction followed chronic non-compliances and ongoing substantial supervisory concerns when announcing the action against PPBL. The RBI had earlier, on March 11, 2022, prohibited PPBL from onboarding new clients effective immediately.
The RBI's most recent directive to Paytm Payments Bank instructs them to refrain from accepting deposits, credit transactions, or top-ups in any customer accounts, prepaid cards, wallets, FASTags, NCMC cards, or other prepaid devices beyond February 29, 2024. Even after February 29th, the central bank has permitted the crediting of interest, cashbacks, or refunds.
Moreover, PPBL members are free to take out or use any balance from any of their accounts, including savings bank accounts, current accounts, prepaid cards, FASTags, and National Common Mobility Cards, as long as they have money available.
The RBI also ordered One97 Communications Ltd.'s "nodal accounts" to be closed. Despite owning a 49% share in Paytm Payments Bank Limited, One97 Communications - the firm that owns the Paytm brand - classifies the latter as an associate rather than a subsidiary.
