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| Photo Credit: REUTERS
Reserve Bank of India (RBI) Deputy Governor J. Swaminathan on Thursday clarified that the Paytm app was not impacted by the regulatory directive which was applicable only to Paytm Payments Bank Ltd.
Replying to a query specifically in this regard, he said that the directives did not impact the functionality or operations of the Paytm app. “Just to clarify, the action is against Paytm Payments Bank, not against the Paytm app. The app is not impacted by our action,” Mr. Swaminathan said.
Since the RBI has set a deadline for migration of customers’ wallets from Paytm Bank and some banks are reportedly seeking regulatory approval, Mr. Swaminathan said such decision for banks to partner with Paytm Payments Bank would be their “business decision.”
“We assure our users and merchant partners that the Paytm app remains fully operational, and our services are unaffected,” a Paytm spokesperson said in a statement.
“Paytm continues to lead in mobile payments innovation and we are eager to enhance our service offerings through partnerships with various banks. We assure our merchant partners that Paytm QR, Soundbox and card machines will continue to work as always,” the spokesperson added.
Declining to comment on any individual institution as a policy, Mr. Swaminathan said supervisory action was initiated for persistent non-compliance. “Such supervisory actions are invariably preceded by years of bilateral engagement wherein we not only point out the deficiencies, [but also] give them more than adequate time to take corrective action,” he added.
“As a regulator it is incumbent on us to take the interest of ultimate consumer by protecting the stability of the financial system,” the Deputy Governor said.
He said the RBI was getting feedback from consumers and would respond appropriately in consumer interest. He also said that the central bank would come out with an FAQ on Paytm Bank next week.
To another question, RBI Governor Shaktikanta Das said as a responsible regulator, there was no reason for the RBI to act if everything was complied with.
He said when constructive engagement did not work or the regulated entity did not take effective action, the RBI would go in for supervisory restrictions.
He said all actions were in the best interest of systemic stability and protection of depositors and customers interest.
On allegations of discouraging innovation, Mr. Das said, “Let me emphatically state that the RBI is and will continue to inculcate and support innovation and technology in the financial sector. Let there by any doubt about RBI’s commitment to promote innovation and technology in the financial sector.”
