RBI Governor Shaktikanta Das has said that all decisions taken by the central bank are carefully considered and will not be reviewed.
Mumbai: In a major update amid the Payment Payments Bank crisis, Reserve Bank of India Governor Shaktikanta Das has ruled out any review of the central bank’s action against Paytm Payments Bank (PPBL). He has said that the decision was taken after a comprehensive assessment of the functioning of the lender and will not be reviewed, as per a report by news agency PTI.
In a major action against Paytm Payments Bank (PPBL), the RBI, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTTags and other instruments after February 29.
“At the moment, let me say very clearly that there is no review of this (PPBL) decision. If you are expecting a review of the decision, let me very clearly say there is going to be no review of the decision,” 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 the RBI is supportive of the fintech sector, Das said it is also committed to protecting the interests of customers as well as ensuring financial stability.
Moreover, the central bank is also expected to soon issue a set of FAQs (Frequently Asked Questions) on the Paytm matter this week.
While announcing the action against PPBL, the RBI said the direction follows persistent non-compliances and continued material supervisory concerns. On March 11, 2022, the RBI barred PPBL from onboarding new customers with immediate effect.
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RBI Asks Paytm Payments Bank Not To Take Deposits
In its latest action, RBI has asked the Paytm Payments Bank not to take deposits, credit transactions, or 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 for 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, is permitted without any restrictions, up to their available balance.
RBI also directed termination of the ‘nodal accounts’ of One97 Communications Ltd. One97 Communications, which owns the 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.
RBI Issues Clarification
The RBI, which has received several queries and clarifications on the issue of Paytm Payments Banks, reiterated that it will issue a list of FAQs soon on this issue.
“I want to emphasize that you should wait for the FAQ we are issuing. In that FAQ, all the problems faced by customers will be addressed. Our priority is to ensure that customers and depositors do not face any inconvenience. That’s why we have given a one-month time frame. The action was taken on January 31st, and we have given time until February 29th. We have provided this time because the transition, customer interest, and depositor interest are always our top priorities. Hence, we have given a one-month period for customers to make informed decisions and proceed with the transition if they wish,” RBI Governor Shaktikanta Das said.
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Earlier on February 9, the Board of One 97 Communications Limited, which operates Paytm, announced the formation of a Group Advisory Committee chaired by former SEBI Chairman M Damodaran to work with the Board in further strengthening compliance and regulatory matters.
