“Hardly Any Room To Review The Action”: RBI Governor Shaktikanta Das On Paytm Probe

The Reserve Bank of India's (RBI) probe against Paytm Payments Bank Limited (PPBL) has new updates after the RBI Governor Shanktikanta Das clarified in a press conference in Delhi today that there is hardly any scope for reconsideration of the measures taken against the Paytm bank. The allegations are based on a detailed evaluation by the regulatory authority involving money laundering and non-compliance with KYC regulations. The drastic actions are taken after a thorough investigation, and the institutions received multiple regulatory warnings in the past, mentioning the consequences.

On 31st January, the central bank asked the PPBL to freeze its operations, including wallet business, Fastag payments and deposit acceptance, after 29th February 2024. The RBI has accused Paytm Payments Bank of money laundering, non-compliance with KYC procedures, Unauthorised accounts, transfer amounts exceeding regulatory limits and non-adherence to documentation. As per the governor, sufficient time is provided to the institution to take corrective actions and comply with regulatory requirements.

Shaktikanta Das further emphasised that the RBI supports and expects the Fintech sector to grow. However, the regulatory authority has deepened its supervisory approach, aligning primary importance towards public fund security and maintaining financial stability in the country. The RBI is expected to release a Frequently Asked Question (FAQ) session this week, which the officials assure would deal with customer interest issues. He assured the press that whatever actions would be taken against the payment giant would only be considered after months or sometimes years of talks.

Paytm spokesperson clarified to the press that the company's ownership structure has changed. The China-backed Ant Financial Ltd has reduced the stake below 10 per cent in the group, and the group's founding promoter holds the majority stake currently. In November 2022, the RBI rejected the PPBL application for a Payment Aggregator (PA) Licence. Last week, the Paytm Group declared setting up an Advisory Committee chaired by former SEBI Chairman Mr. M. Damodaran, to work with the Board in further compliance strengthening and regulatory matters. The committee consist of other members like Mr Mukund Manohar Chitale, who is the former President of the Institute of Chartered Accountants of India (ICAI), former Chairman of the National Advisory Committee and Mr Ramachandran Rajaraman, who is the former Chairman and Managing Director of Andhra Bank, a former Whole Time Director of Syndicate Bank, and a member of the Advisory Board at Central Vigilance Commission.

Earlier during the day, the MD and CEO of Axis Bank, Mr. Amitabh Chaudhry clarified with the media that Axis Bank is in discussions with the alleged payments bank for general business. They are open to working with Paytm if the regulatory body permits, as they believe Paytm has a strong presence and is among the significant players in the industry.

Shares of Paytm on Monday session ended at Rs. 416.80/-, a fall of 0.73% or Rs. 3.05/- since Friday's closing. The current price stays only Rs. 20/- away from the 52-week low point of Rs. 395/-. The value of One97 Communication Ltd. shares, parent company of Paytm has collapsed more than 40% in the past nine trading sessions and remains almost 35.5% lower since the beginning of 2024.