RBI rules out review of action taken against Paytm Payments Bank

New Delhi, February 12

Reserve Bank of India Governor Shaktikanta Das on Monday ruled out any review of the central bank’s action against Paytm Payments Bank Ltd (PPBL), saying that its decisions are well thought out.

RBI, he said, is not against any fintech but its prime objective is to protect the interest of customers and depositors.

Observing that RBI is always supportive of the fintech sector, Das said it is the endeavour of the central bank to ensure rapid growth of the sector.

With regard to action taken against PPBL, he said directives against any regulated entities are taken whenever it finds that they don’t take any action even after they are told to comply with the regulations.

“We have taken action against PPBL after due consideration and soon FAQs (Frequently Asked Questions) will be issued for the benefit of its customers,” Das said after the 606th meeting of the Central Board of Directors of RBI.

The meeting was addressed by Finance Minister Nirmala Sitharaman.

In a major action against PPBL, the central bank, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTTags and other instruments after February 29.

Ruling out any relaxations, Das on Monday said, “at the moment, let me say very clearly, there is no review of this (PPBL) decision. If your are expecting a review of the decision, let me very clearly say there is (going to be) no review of the decision”.

“FAQs which we are proposing to issue is targeting the inconvenience or issues faced by the depositors and customers wallet users, FASTag holders. Whatever is in the customers’ interest that we are dealing in FAQs. Regarding review of decision, there is nothing on the table,” he said.

While announcing the action against PPBL, RBI had said the direction follows persistent non-compliances and continued material supervisory concerns.

On March 11, 2022, RBI had barred PPBL from onboarding new customers with immediate effect.

In its latest action, RBI has asked the PPBL not to take deposits/ credit transactions/top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards, among others, after February 29.

However, the central bank has allowed credit of interest, cashbacks, or refunds even beyond February 29.

Further, withdrawal or utilisation of balances by PPBL customers from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards, are permitted without any restrictions, up to their available balance.

RBI has also directed termination of the ‘nodal accounts’ of One97 Communications Ltd, which owns the Paytm brand.

One97 Communications holds a 49 per cent stake in PPBL but classifies it as an associate of the company and not as a subsidiary.