Union Minister Rajeev Chandrasekhar reportedly reacted to the latest controversy on PayTm and said on Saturday that being a fintech or a technology company does not exempt any entity from regulatory oversight.
According to ET Now, the Union Minister of State for Entrepreneurship, Skill Development, Electronics and Technology said regulator has an absolute authority to regulate an entity. He was speaking on the sidelines of the launch of the Digital India Future Labs in New Delhi on Saturday.
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“A sectoral regulator has an absolute authority to regulate every entity within the sector. The RBI (Reserve Bank of India) has done so and this is within their purview to do so,” Chandrasekhar was quoted by MoneyControl as saying.
“Being a FinTech or being a tech company doesn’t absolve anybody from regulatory oversight,” Chandrasekhar added.
What’s Paytm crisis?
On January 31, the RBI barred Paytm Payments Bank Ltd (PPBL) from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, and FASTags, among others after February 29, 2024.
Till then, customers can add money as well as withdraw money from the Paytm wallet and PPBL account.
The RBI ordered PPBL to settle all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) by March 15, 2024 and no further transactions would be permitted thereafter.
The RBI said the action against PPBL followed a comprehensive system audit report and subsequent compliance validation report of external auditors.
Notably, the digital payments and services app Paytm is working and will continue to work as usual even after February 29, its CEO Vijay Shekhar Sharma said on Friday.
The founder and CEO of One97 Communications Ltd (OCL), which owns the Paytm brand, on social media platform X said the company is committed to serving the nation in full compliance. “To every Paytmer, Your favourite app is working, and will keep working beyond 29 February as usual,” Sharma said.
Sharma was earlier quoted by PTI as saying, “On behalf of Paytm, I can say it is more of a big speed bump but it is something that we believe that with partnership of other banks and capabilities that we have already developed, we will be able to see through in the next few days or quarters as the case will be.”
Amid this, Revenue Secretary Sanjay Malhotra was quoted by Reuters as saying that the Enforcement Directorate (ED) will probe Paytm Payments Bank if any fresh charges of fund siphoning are found,. “If there are any fresh charges of money laundering against Paytm by the RBI, those will be investigated by Directorate of Enforcement as per the law of the land,” Malhotra said.
Fintech firm Paytm sees an impact of ₹300-500 crore on its annual operational profit, as its customers will not be able to add money to their wallets, FASTags etc as RBI barred Paytm Payments Bank Ltd from accepting deposits or top-ups in any customer account.
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Published: 03 Feb 2024, 04:56 PM IST