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The Reserve Bank of India has finally broken its silence on the ban on Pay Bank of payments. Senior RBI Officials said banning Paytm payment banks from accepting deposits was part of “a supervisory measure and the restrictions are proportionate to the severity of the situation.”
Actions followed after months of “warning”
Addressing the media, RBI Deputy Governor Swaminathan J said such actions are preceded by several months of bilateral engagement and regulated entities are given sufficient time to take corrective measures to protect the consumers and ensure the financial stability of the system.
No reason for the fintech industry to worry
Some sections have feared that the ruling against Paytm could impact the entire fintech sector. Deny these fears, RBI governor Shaktikanta Das said this was a problem with a specific institution and that there was no concern for the entire system. “Let me set the record straight on the Paytm issue. There is no concern for the system as a whole. It is an issue with a specific institution,” Das told reporters. He stressed that there are currently no concerns about the financial system. However, individual entities should be careful due to the long-term impact.
“The regulations are in place. This is not a regulatory deficiency. It’s a question of respecting various parameters. I don’t want to elaborate on the details,” Das said.
Restrictions imposed in sync with
He maintained that the restrictions imposed on Paytm Payments Bank are proportionate to the gravity of the situation and a responsible regulator must take all measures in accordance with the system and in the best interest of customers.
The RBI works with entities on a bilateral basis, incentivizes them to comply by providing sufficient time and imposes trade restrictions or supervisory measures only when the entity fails to take necessary steps, Das said. “When constructive engagement does not work or the regulated entity does not take effective action, we opt for the imposition of trade restrictions,” Das said, adding that actions are “proportionate” to the severity of the situation. situation.
Actions followed after months of “warning”
Addressing the media, RBI Deputy Governor Swaminathan J said such actions are preceded by several months of bilateral engagement and regulated entities are given sufficient time to take corrective measures to protect the consumers and ensure the financial stability of the system.
No reason for the fintech industry to worry
Some sections have feared that the ruling against Paytm could impact the entire fintech sector. Deny these fears, RBI governor Shaktikanta Das said this was a problem with a specific institution and that there was no concern for the entire system. “Let me set the record straight on the Paytm issue. There is no concern for the system as a whole. It is an issue with a specific institution,” Das told reporters. He stressed that there are currently no concerns about the financial system. However, individual entities should be careful due to the long-term impact.
“The regulations are in place. This is not a regulatory deficiency. It’s a question of respecting various parameters. I don’t want to elaborate on the details,” Das said.
Restrictions imposed in sync with
He maintained that the restrictions imposed on Paytm Payments Bank are proportionate to the gravity of the situation and a responsible regulator must take all measures in accordance with the system and in the best interest of customers.
The RBI works with entities on a bilateral basis, incentivizes them to comply by providing sufficient time and imposes trade restrictions or supervisory measures only when the entity fails to take necessary steps, Das said. “When constructive engagement does not work or the regulated entity does not take effective action, we opt for the imposition of trade restrictions,” Das said, adding that actions are “proportionate” to the severity of the situation. situation.
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