Governor of the Reserve Bank of India (RBI), Shaktikanta Das, vehemently justified the move against Paytm Payments Bank on Wednesday. When the limitations were largely directed at a bank's business activities, Das claimed he was unable to comprehend the narrative that the banking regulator was stifling the fintech industry.
Confident in the nation's economic prospects, Das predicted that real GDP growth for FY24 will probably approach 8% rather than the government's revised projection of 7.6%.
“The action was against a regulated entity (RE)," Das said in an interview with ET Now, dispelling concerns that the RBI was treating fintechs unfairly. Here, the target is a payments bank rather than a fintech startup. I find it incomprehensible and devoid of any justification why a story purporting that the RBI has taken action against fintech businesses has been fabricated. He clarified that unless they are NBFCs, fintech businesses are not subject to RBI regulation.
The RBI placed many business limitations on Paytm Payments Bank on January 31. These included a prohibition on the bank's ability to take on new credit transactions and receive deposits beyond February 29. The embargo was later extended to March 15.
Fintech players, on the other hand, were quite critical of it because they believed it was an attempt to restrict the sector. According to a number of startup owners, the RBI is treating new age enterprises in a "too stringent" manner. Some even begged the government to intervene, believing that the fintech industry would be destroyed by the banking regulator's actions against them.
