RBI Governor’s Response to Paytm Payments Bank Crisis and Strict Actions Taken

The RBI Deputy Governor Swaminathan J stated that they are closely monitoring Paytm Payments Bank and will take necessary steps as required in the future. RBI Governor Shaktikanta Das also addressed the media, emphasizing that strict action was taken with the seriousness of the violation in mind. He highlighted that all RBI actions are aimed at safeguarding systemic stability and customer interests, and restrictions are proportionate to the gravity of the situation. When constructive engagement fails, imposing business restrictions becomes necessary, added the Governor.

Shaktikanta Das mentioned that while he cannot disclose detailed information about the case, the RBI will release a FAQ next week in response to public queries. Last week, the RBI directed Paytm Payments Bank to halt the acceptance of new deposits in its accounts and popular digital wallets from March, citing supervisory concerns and non-compliance with regulations. One of the primary reasons for the strict curbs by the Reserve Bank of India was the creation of numerous accounts on Paytm Payments Bank without proper identification. These accounts, which conducted transactions worth crores of rupees, raised fears of potential money laundering due to inadequate Know-Your-Customer (KYC) compliance.

Additionally, more than 1,000 users were found to have linked the same Permanent Account Number (PAN) to their accounts. The bank’s compliance submissions were found to be incorrect during verification processes conducted by both the RBI and auditors.