NEW DELHI: The recent regulatory action taken by the Reserve Bank of India (RBI) against Paytm Payments Bank has highlighted the significance of adhering to laws for other fintech firms and that compliance cannot be “optional”, according to union minister Rajeev Chandrasekhar.
In an interview with the news agency, PTI, the minister of state for electronics and IT explained that the case of Paytm Payments Bank demonstrated how a highly ambitious entrepreneur failed to realize the importance of regulatory compliance.Chandrasekhar made it clear that no company, regardless of its size or origin, can escape the consequences of non-compliance with the law.
Meanwhile, Chandrasekhar disputed the notion that the RBI’s actions have rattled the entire fintech industry and said, “and this notion that RBI… the regulator’s action against Paytm Payments Bank has rattled fintech is… I don’t think that’s a correct characterisation. I think it has drawn the attention of fintech entrepreneurs, to the fact that you also have to know how to comply with the law. Regulatory compliance is not an optional thing for any country in the world, certainly not in India, and it is something that they (entrepreneurs) should pay more attention to.”
The minister further explained that entrepreneurs often become so engrossed in building their businesses that they overlook the rules laid down by regulatory bodies.
Chandrasekhar emphasized that there can never be a situation where a company, whether in social media or fintech, can expect to flout the law and evade consequences.
The issues surrounding Paytm Payments Bank revolve around its association with One97 Communications Limited, which holds a 49% stake in the bank. Paytm Founder and CEO Vijay Shekhar Sharma owns the remaining 51% stake. The RBI’s regulatory actions, based on persistent non-compliance and supervisory concerns, prompted the central bank to advise customers and merchants of Paytm Payments Bank to shift their accounts to other banks by March 15.
Addressing the concerns of fintech firms and merchants, the RBI clarified that Paytm QR codes, Paytm Soundbox, and Paytm POS terminals will continue to function if they are linked to other banks instead of Paytm Payments Bank. In response to the situation, One97 Communications has transferred its nodal account to Axis Bank, ensuring the continuity of Paytm QR, Soundbox, and card machines beyond the March 15 deadline.
In an interview with the news agency, PTI, the minister of state for electronics and IT explained that the case of Paytm Payments Bank demonstrated how a highly ambitious entrepreneur failed to realize the importance of regulatory compliance.Chandrasekhar made it clear that no company, regardless of its size or origin, can escape the consequences of non-compliance with the law.
Meanwhile, Chandrasekhar disputed the notion that the RBI’s actions have rattled the entire fintech industry and said, “and this notion that RBI… the regulator’s action against Paytm Payments Bank has rattled fintech is… I don’t think that’s a correct characterisation. I think it has drawn the attention of fintech entrepreneurs, to the fact that you also have to know how to comply with the law. Regulatory compliance is not an optional thing for any country in the world, certainly not in India, and it is something that they (entrepreneurs) should pay more attention to.”
The minister further explained that entrepreneurs often become so engrossed in building their businesses that they overlook the rules laid down by regulatory bodies.
Chandrasekhar emphasized that there can never be a situation where a company, whether in social media or fintech, can expect to flout the law and evade consequences.
The issues surrounding Paytm Payments Bank revolve around its association with One97 Communications Limited, which holds a 49% stake in the bank. Paytm Founder and CEO Vijay Shekhar Sharma owns the remaining 51% stake. The RBI’s regulatory actions, based on persistent non-compliance and supervisory concerns, prompted the central bank to advise customers and merchants of Paytm Payments Bank to shift their accounts to other banks by March 15.
Addressing the concerns of fintech firms and merchants, the RBI clarified that Paytm QR codes, Paytm Soundbox, and Paytm POS terminals will continue to function if they are linked to other banks instead of Paytm Payments Bank. In response to the situation, One97 Communications has transferred its nodal account to Axis Bank, ensuring the continuity of Paytm QR, Soundbox, and card machines beyond the March 15 deadline.
