RBI not against fintechs, Paytm order against a regulated entity: Shaktikanta Das
- Das has countered the criticism that the central bank is against fintechs in India and that RBI's recent action against Paytm Payments Bank was only against a regulated entity.
The Reserve Bank of India (RBI) Governor Shaktikanta Das has rejected the criticism that the central bank is against fintechs in India, saying the RBI's recent order against Paytm Payments Bank (PPBL) was only against a regulated entity.
"The RBI’s action was against a regulated entity. It was not against any fintech company. I fail to understand why a narrative is built that RBI has acted agianst a fintech company. In this case (PPBL), the action is against Payments bank. I am not being defensive," Shaktikanta Das said in an interview to ET Now television channel on March 6.
Das said that the time given till March 15 for PPBL customers to shift accounts and wallets to other banks is sufficient, indicating that a further extension in the deadline in unlikely. “If you have a Paytm payments app, please link it to some other bank by March 15,” said Das, adding that the NPCI will consider Paytm’s application for the third party application license for UPI transactions.
“We have said we have no objection if NPCI decides (to permit Paytm). Our action was against bank, not the app,” said Das. The RBI Governor also listed central bank's initiatives such as creation of a fintech department to promote the industry. "In the financial sector, there are rules of the game. Our endevaour is to ensure theatre are no major accidents," added Das.
On January 31, the RBI placed operational restrictions on PPBL due to the ongoing non-compliance issues and significant supervisory concerns. The RBI barred PPBL from accepting further deposits and top-ups, or doing credit transactions in any customer accounts, among others.
Meanwhile, Das also said that India’s economy will likely grow faster than the government is predicting, reaching close to eight per cent in the fiscal year through March.
“High frequency indicators suggest every possibility 7.6 per cent growth for current year being exceeded,” Das told the television channel on Wednesday. “The growth for the current year could be very close to eight per cent.”
The government last week raised its full-year projection after reporting surprisingly strong growth in the final three months of 2023. The RBI is forecasting growth of seven per cent for the coming fiscal year, making the economy one of the fastest-expanding in the world.
The momentum of economic activity is robust in the current year, Das said, adding that urban demand and investment activity has been strong. He explained that the rural demand is showing signs of revival, private investment is picking up and capacity usage is high.
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First Published:6 Mar 2024, 05:59 PM IST
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