RBI Governor Shaktikanta Das rules out review of action against Paytm Payments Bank

RBI Governor Shaktikanta Das said that the central bank is supportive of the fintech sector, but it committed to protecting consumer interest

February 12, 2024 05:26 pm | Updated 08:16 pm IST - New Delhi

Reserve Bank of India Governor Shaktikanta Das addresses a press conference after a customary post-budget meeting with the Central Board of Directors of Reserve Bank of India, in New Delhi, Monday, Feb. 12, 2024.

Reserve Bank of India Governor Shaktikanta Das addresses a press conference after a customary post-budget meeting with the Central Board of Directors of Reserve Bank of India, in New Delhi, Monday, Feb. 12, 2024. | Photo Credit: PTI

Reserve Bank of India Governor Shaktikanta Das ruled out any review of the central bank's action against Paytm Payments Bank (PPBL) on February 12, saying the decision was taken after a comprehensive assessment of the functioning of the lender.

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

Also Read: Paytm Payments Bank meltdown, its meaning | Explained

"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," Mr. Das said at a press conference after the 606th meeting of the Central Board of Directors of the Reserve Bank of India. The meeting was addressed by Finance Minister Nirmala Sitharaman.

The Governor said any decision against entities regulated by the RBI is taken after a comprehensive assessment. While emphasising that RBI is supportive of the fintech sector, Mr. Das said it is also committed to protect the interest of customers as well as ensure financial stability.

The RBI is expected to soon issue a set of FAQs (Frequently Asked Questions) on the Paytm matter this week.

RBI’s action against Paytm Payments Bank

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

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

In its latest action, RBI has asked the Paytm Payments Bank not to take deposits, credit transactions, top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards, among others after February 29, 2024. 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.

The RBI also directed termination of the 'nodal accounts' of One97 Communications Ltd. One97 Communications, which owns Paytm brand, holds a 49 per cent stake in Paytm Payments Bank Limited, but classifies it as an associate of the company and not as a subsidiary.

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