The Reserve Bank of India governor has said that the action on Paytm was due to lack of compliance by the company. He said there are no systemic worries in the system.
Das said the RBI is a responsible regulator, and asked why should it act against a regulated entity if it has complied with all the requirements.
He did not specify the shortcomings resulting in the RBI action, but made it clear that it is driven by a “lack of compliance” at Paytm.
The RBI works with entities on a bilateral basis, encourages them to comply by giving sufficient time, and imposes business restrictions or supervisory actions only when the entity does not take necessary actions, he reiterated.
“When constructive engagement doesn’t work or when the regulated entity does not take effective action, we go for imposing business restrictions,” Das said, adding that the actions are “proportionate” to the gravity of the situation. The actions are driven by systemic stability or protection of depositor or customers’ interests, he added.
The Governor also affirmed the Reserve Bank’s commitment to support innovation in the financial sector, saying there should not be “any doubt” around it.
Acknowledging that the RBI has received feedback from the wider public, Das said the RBI will be coming out with a set of FAQ (frequently asked questions) to assuage the concerns.
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