Paytm Payments Bank Issue Under Review
Over the last few days, India’s top fintech company, Paytm is constantly breaking the headlines of the news. This time as well, it is drawing attention after the advisory committee of the fintech company was created to monitor the regulatory matters of the company. This advisory committee was formed on 9th February 2024. The main motive behind creating the advisory committee is to advise the company on strengthening compliance. This committee is created by the parent company of fintech, One 97 Communications Ltd.
As we all know, the Reserve Bank of India (RBI) took serious action against the Payments bank business of Paytm. In a recent interview with a media outlet, the head of the advisory committee stated that they have yet to identify any issue. It is worth noting that the committee is headed by the former Securities and Exchange Board of India (Sebi) chairman, M Damodaran. During the interaction with the media, the head of the committee addressed the issues related to the order of RBI against Paytm. He talked about the impact of the order of RBI on the fintech company and said that at present, the company is dealing with the RBI.
It is worth noting that Damodran addressed the media during the launch of his biography “The Turmeric Latte” which was compiled by his former Sebi co-workers.
What Was The Order Of RBI
Earlier, the RBI ordered PPBL to halt all the monetary activities of the bank including deposits, credit transactions or top-ups in customer accounts, FASTags, wallets, prepaid instruments, and National Common Mobility Cards after the end of February 2024. Earlier, the deadline for the halt was 29th February which was later extended to 15th March 2024. Due to the order of the RBI, the fintech company will now face the impact of Rs 300-500 crore on the annual operational profit of the company.
During the interview, a reporter asked about the views of the head of the advisory committee on the negative impact of Paytm and in this reply, he said “It is too early. We have not got to that stage.” After the action of RBI on PPBL, the top fintech company earlier this month shared the news of the set up of a group advisory committee. Apart from Damodran, the committee also includes veteran professionals including former Institute of Chartered Accountants of India (ICAI) President M.M. Chitale and a former governing Council Member of the Banking Codes and Standards Board of India nominated by the central bank of India. As per One 97 Communications Ltd, the group advisory committee also includes former Chairman and Managing Director of Andhra Bank R Ramachandran.
In the meantime, ICAI President Ranjeet Kumar states that the Financial Reporting Review Board (FRRB) may look at the fintech company issue and then consider appropriate action if it is needed. Agarwal states “So far, we have not considered it (Paytm issue), but the board meeting of the FRRB will take place in the near future and it will consider appropriate action if needed. So far, we have not decided anything as far as this matter.”