NEW DELHI: Allaying fears over the functioning of digital payment banks amid Paytm controversy, Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said there is no need to worry about the fintech system at the moment.
He said the central bank will issue FAQs next week in this regard. The governor made some general observations about the regulated entities including Paytm. According to him, the central bank has deepened its supervisory system approach and methods over the last few years.
The apex banks’ emphasis has always been on the bilateral engagement with the regulated entities to nudge them for corrective actions and sufficient time is given for undertaking such corrective actions, the RBI governor said.
“When such corrective engagement, which we undertake, that doesn’t work or when regulated entities don’t take effective action, we go for imposing restrictions. Such restrictions which we impose are always proportionate to the gravity of the situation,” Das said. He said RBI’s actions are in the best interest of systematic stability and protection of depositors or customers’ interest.
“These aspects can’t be compromised. Individual entities should be mindful of these aspects for long term success. RBI is and will continue to support and encourage innovation and technology in financial sector. Let there be no doubt about RBI’s commitment to promote technology in financial sector,” Das reassured briefing media.
Meanwhile, the RBI has proposed to put in place a principle-based framework for authentication of digital transactions to facilitate adoption of alternative mechanisms for enhancing security of digital payments.