Given the fintech giant’s extensive user base, the Reserve Bank of India (RBI) is poised to clarify the turmoil surrounding Paytm crisis. 

The financial services secretary Vivek Joshi emphasized that the RBI’s measures were implemented with consumer protection in mind. Joshi reiterated that adherence to regulatory requirements is imperative for companies, stressing the need to comply with all applicable laws.

 

This statement from the financial services secretary follows a request from the enforcement directorate and financial intelligence unit for the RBI to report its recent actions against Paytm Payments Bank.

 

On January 31, 2023, the RBI imposed restrictions on Paytm Payments Bank, prohibiting it from accepting deposits, credit transactions, or top-ups in customer accounts. The central bank suspended various banking services, including the UPI facility and fund transfers, effective February 29, 2024.

 

Despite the ongoing challenges, Paytm’s shares saw a notable uptick, closing over 3% higher on the Bombay Stock Exchange (BSE) on February 6. This surge came after the shares had hit the lower circuit for three consecutive sessions.

 

Vijay Shekhar Sharma, the founder of Paytm, reportedly met with Finance Minister Nirmala Sitharaman on February 6 to discuss the ramifications of the RBI’s restrictions on Paytm Payments Bank. Sharma’s meeting with the finance minister, which lasted nearly 10 minutes, primarily focused on addressing the central bank’s directives.

 

The day before meeting with the finance minister, Sharma had engaged with RBI officials to address regulatory concerns surrounding Paytm Payments Bank. The topics discussed were seeking an extension to the current deadline of February 29 and seeking clarity on the transfer of the wallet business license.

 

Meanwhile, a group of Indian startup founders, including Murugavel Janakiraman of Bharat Matrimony, Ritesh Malik of Innov8, Yashish Dahiya of PB Fintech, and Rajesh Magow of MakeMyTrip, penned a letter to Prime Minister Narendra Modi, Finance Minister Sitharaman, and RBI Governor Shaktikanta Das. The letter urged the government to review and reconsider the directives concerning Paytm Payments Bank, emphasizing the importance of constructive dialogue with the fintech ecosystem.