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The Reserve Bank of India (RBI) announced today that the enforcement action against Paytm Payments Bank was due to continued non-compliance with regulatory norms. RBI Deputy Governor Swaminathan J stated that the bank's operations are under close monitoring, and appropriate measures will be taken as necessary in the future.
RBI Governor Shaktikanta Das, addressing the media, emphasised that the stringent measures were implemented considering the severity of the violations.
“RBI will be issuing a set of FAQs (frequently asked questions) next week to assuage public concerns following the Paytm action,” Das said.
The Reserve Bank of India (RBI) has stated that Paytm App will not be impacted by the recent order issued against Paytm Payment Bank.
"Just to clarify, the action is against Paytm Payments Bank, not against the Paytm app. The app is not impacted by our action, delineating the scope of the RBI's directive," said the RBI Deputy Governor Swaminathan J said, in the press briefing following the Monetary Policy Committee (MPC) meeting.
"We give sufficient time to every entity to comply and sometimes more than sufficient time to the entities for compliance. If they would comply, why would a regulator like us would have to take action?" RBI governor Shaktikanta Das said in the briefing after the monetary policy committee address.
“This is a supervisory action on a regulated entity for persistent non-compliance. The central bank will take suitable steps as warranted going ahead,” deputy governor Swaminathan J said.
Speaking on this Paytm spokesperson said, "We assure our users and merchant partners that the Paytm app remains fully operational, and our services are unaffected. Paytm continues to lead in mobile payments innovation, and we are accelerating our partnerships with banks to offer uninterrupted services. We assure our merchant partners that Paytm QR, Soundbox, and card machines will continue to work as always. Our dedication to providing seamless payment solutions and promoting financial inclusion across India remains as strong as ever."
The Reserve Bank of India (RBI) imposed strict restrictions on Paytm Payments Bank due to several accounts being created without proper identification. These accounts, lacking adequate Know-Your-Customer (KYC) verification, processed transactions worth millions of rupees, raising concerns about potential money laundering.
Moreover, over 1,000 users were discovered to have linked the same Permanent Account Number (PAN) to their accounts. Upon verification by both the RBI and auditors, it was revealed that the bank's compliance submissions were inaccurate.
