Amid the ongoing problem faced by leading fintech player Paytm, Finance Minister Nirmala Sitharaman has decided to meet heads of financial technology companies (fintechs) next week to persuade them to strictly follow regulatory norms. According to sources, Sitharaman will be meeting CEOs of fintech companies next week to hear their concerns and problems.
Paytm Payments Bank Ltd, an entity promoted by One97 Communications Ltd, faced regulatory actions by the Reserve Bank for failure to comply with a host of regulatory norms, including Know Your Customer (KYC) guidelines.
The sources revealed that FM will impress upon them the need to abide by regulatory norms as they are dealing with the money of individuals.
The upcoming meeting is anticipated to witness the participation of high-ranking officials from the Reserve Bank, Ministry of Finance, Department for Promotion of Industry and Internal Trade, and other key stakeholders.
In a recent development, the RBI has advised both customers and merchants associated with Paytm Payments Bank Ltd (PPBL) to transfer their accounts to other banks by March 15, extending the deadline from February 29. This decision grants an additional 15 days to PPBL for winding down most of its operations, encompassing deposit and credit transactions.
This extension is intended to accommodate the interests of PPBL customers, including merchants, allowing them a bit more time to make alternative arrangements in the broader public interest.
Furthermore, the RBI has issued directives for the termination of the ‘nodal accounts’ of One97 Communications Ltd, the entity that owns the Paytm brand.
Reserve Bank Governor Shaktikanta Das, in a media statement, emphasized the central bank’s ongoing support for the fintech sector, highlighting its commitment to fostering the rapid growth of the industry.
Financial Services Secretary Vivek Joshi also highlighted the importance of fintech firms adhering to regulations, emphasising that as they scale up, they must shoulder increased responsibilities.
