In response to regulatory actions faced by Paytm Payments Bank Ltd (PPBL), Finance Minister Nirmala Sitharaman is set to meet the heads of financial technology companies next week. The meeting aims to discuss the challenges and concerns of the fintech sector while emphasizing the critical importance of strict adherence to regulatory norms.
Paytm Payments Bank, promoted by One97 Communications Ltd, recently faced actions from the Reserve Bank of India (RBI) for non-compliance with various regulatory norms, including Know Your Customer (KYC) guidelines.
Sources indicate that Sitharaman will engage with CEOs of fintech firms to understand their perspectives and address their problems. Simultaneously, she will emphasize the necessity for compliance with regulatory norms, considering the sensitive nature of dealing with individuals’ finances.
The meeting is expected to draw the participation of senior officials from the Reserve Bank, the finance ministry, and the Department for Promotion of Industry and Internal Trade.
Recently, the RBI extended the deadline for customers and merchants of Paytm Payments Bank Ltd to shift their accounts to other banks from February 29, 2024, to March 15, 2024. This extension was granted to facilitate customers and merchants in making alternative arrangements.
Additionally, the RBI directed the termination of the ‘nodal accounts’ of One97 Communications Ltd, the owner of the Paytm brand. Although One97 Communications holds a 49% stake in PPBL, it is classified as an associate rather than a subsidiary.
Reserve Bank Governor Shaktikanta Das expressed support for the fintech sector, emphasizing the central bank’s commitment to ensuring its rapid growth. Financial Services Secretary Vivek Joshi highlighted the importance of fintech companies complying with regulations, stressing that with scale comes responsibility.
