NEW DELHI : Finance ministry sources on Wednesday said the Centre is not directly involved in the Paytm case. The ministry stated that the responsibility lies with the Reserve Bank of India (RBI) with regard to this issue.
As per the sources, Vijay Shekhar Sharma, Paytm founder, met finance minister Nirmala Sitharaman on Tuesday to discuss non-compliance and supervisory issues flagged by the apex bank. “The minister met Sharma as a formality. She made it clear that it was a regulatory issue and RBI is the ultimate authority to decide upon it,” told a person in the know of the development. Earlier, Sharma had met RBI officials to understand the way forward following the central bank’s decision to bar payments bank from accepting deposits beginning March 1. As per reports, at the meeting with the RBI, Sharma sought an extension of February 29 deadline, a transition plan, and detailed the efforts underway to meet compliance specified by the regulator.
As per the sources, Paytm expressed concern to the minister regarding the prohibition on adding money to Paytm Payments Bank accounts and wallets after February 29 and the Fastag ban, highlighting the potential disruption due to the extensive number of affected accounts. While discussing with the RBI, Paytm argued that non-KYC wallets are a legacy issue stemming from digital wallets opened during the demonetisation period when wallets were permitted to be loaded with minimal KYC requirements. In an interview with the agencies, banking secretary, Vivek Joshi said the government has nothing to do with the banning of Paytm from accepting deposits from customers, as it comes under the purview of RBI, which regulates the banks in India.
“It is action taken by the regulator. They regulate the banks. The government has had nothing to do until now when it comes to the actions taken against Paytm. We believe RBI must have taken action in the overall interest of the consumer and the economy,” Joshi was quoted as saying in the reports.
Regarding foreign direct investment (FDI) in Paytm’s payment aggregator subsidiary, Joshi said permission has been requested for investment from China. The application is currently under review as part of an inter-ministerial process and is under consideration, he added. On financial stability concerns due to the RBI’s action against PPBL, Joshi reportedly said it is a very small bank and there are no systemic stability concerns.