RBI to issue FAQ on payments-related queries post Paytm debacle

The Reserve Bank of India will issue a FAQ (Frequently Asked Questions) circular on payment-related queries received after restrictions were imposed on Paytm Payments Bank, especially those pertaining to customers and merchants.

“Over the last few days, we have received a lot of queries and clarifications from various quarters, including members of the public and media. Based on that, we will be issuing a FAQ sometime next week, so that should address all these questions and clarifications which are being raised,” said Governor Shaktikanta Das at the post-policy meet.

He added that the issue does not pertain to deficiencies in the regulatory mechanism, but in compliance by a specific entity. The RBI, on its part, will continue to encourage and support innovation and technology in the financial sector and remain committed to promoting fintechs.

“Regulations are in place and are robust. It is not a case where there was a regulatory deficiency or correction required. It’s an issue of compliance with various parameters, a situation where we are focussed on compliance not being there with regulatory requirements,” said Das.

supervisory role

The Governor went on to make some general observations, without specific reference to Paytm, saying that over the last few years, the RBI has significantly deepened its supervisory systems, approach and methods.

“Our emphasis is always on bilateral engagement with the regulated entities, with focus on nudging them for corrective action and sufficient time is given. When such constructive engagement does not work, or when the regulated entity does not take effective action, we go for imposing supervisory or business restrictions, which are always proportionate to the gravity of the situation,” he said.

Das added that of central bank’s actions are in the best interest of systemic stability and protection of depositors and customers, and these aspects cannot be compromised upon. “Individual entities should be mindful of these aspects for their long-term success.”

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