The recent regulatory measures taken by the Reserve Bank of India (RBI) against Paytm Payments Bank have underscored the critical importance of regulatory compliance for fintech companies, according to Union Minister Rajeev Chandrasekhar. Emphasizing that compliance cannot be treated as optional, the Minister, who is also the Minister of State for Electronics and IT, stated that entrepreneurs must pay full attention to adhering to the law.
In an interview with PTI, Mr. Chandrasekhar highlighted the Paytm Payments Bank case as an example where a dynamic entrepreneur overlooked the necessity of regulatory compliance. He asserted that irrespective of the size or origin of a company, adherence to the laws of the land is mandatory. The ongoing crisis involving PPBL, barred by the RBI from accepting new deposits since March 15, serves as a reminder that non-compliance with regulations will not be tolerated.
Contrary to speculations, Mr. Chandrasekhar dismissed the notion that the RBI’s actions had shaken the entire fintech industry. Instead, he suggested that it had drawn the attention of fintech entrepreneurs to the imperative nature of understanding and abiding by regulatory frameworks. The Minister urged entrepreneurs to balance their focus on business development with a keen awareness of regulatory guidelines, cautioning against overlooking rules established by regulators.
As part of its regulatory action, the RBI has directed customers and merchants of PPBL to transition their accounts to other banks by March 15. Citing persistent non-compliances and supervisory concerns, the RBI has remained firm in its decision. In response to the developments, Paytm’s parent company, One97 Communications, announced a shift of its nodal account to Axis Bank, ensuring the continuity of services beyond the RBI’s deadline.
In conclusion, Minister Chandrasekhar, drawing from his own entrepreneurial experience, urged all digital economy firms, whether domestic or international, big or small, to prioritize compliance with the rules laid down by regulatory authorities. Specifically, in the fintech space, he emphasized the significance of heeding the directives of the RBI, reinforcing the government’s stance on the necessity of compliance within the digital economy.
