“We take all decisions after a lot of discussion, after much consideration. We look at all the aspects, weigh the pros and cons and the angularities. It is done after discussion with the regulated entity… Sometimes these discussions go on for months, at times for two-three years, with any regulated entity. We act when we don’t see effective action,” RBI governor Shaktikanta Das told reporters after a post-budget meeting of the central board, which was addressed by finance minister Nirmala Sitharaman.
The governor said that FAQs will address several of the concerns that consumers may have. On January 31, RBI had decided to bar fresh deposits or loading of wallets and FASTags sold by Paytm Payments Bank after February 29, although withdrawals will be allowed after that.
“The priority is to ensure that customers do not face any inconvenience. That is why we gave one month for the transition,” Das said.
The regulator’s comments ruling out a review of the curbs will put to end any speculation in the market as some players were expecting a reprieve of sorts, following Paytm brass meeting with RBI officials and FM last week.
While some of the startup founders also launched a petition campaign and argued that the regulatory action will impact the entire fintech space and innovation, Das dismissed those suggestions, stating that RBI has been fostering innovation, including UPI, while insisting that regulations need to be followed.
“RBI has always supported fintech and sought to encourage its growth and it wants it to grow. Fintech sector has a very crucial role because it has lakhs and crores of customers. There are several facilities – money can be kept in a wallet, there may be depositors in a payment bank. Customer interest and financial stability are of prime importance. In a regulated environment you have to follow the regulations to run your business,” he said. The RBI chief listed out multiple steps – from regulatory sandbox to innovation hub, its push for digital lending and the Central Bank Digital Currency (or e-rupee) as instances of fostering innovation. RBI has said that Paytm had violated its regulations, including those related to KYC.