The Reserve Bank of India (RBI) on February 8 commented on the issues surrounding Paytm for the first time since it placed major restrictions on Paytm Payments Bank on January 31. These restrictions have created trouble and uncertainty for Paytm and its customers, which include thousands of merchants. After repeated questions from journalists on the issue at the post-monetary policy press conference, the central bank finally broke its silence. RBI governor Shaktikanta Das laid out the following broad points but emphasised that they apply to all regulated entities not just Paytm (emphasis ours): RBI first focuses on bilateral engagement with the regulated entities whenever compliance concerns arise. The central bank nudges the entity to take corrective action and gives sufficient time for the same. It imposes supervisory or business restrictions only when such constructive engagement does not work or when the regulated entity does not take effective action. The restrictions imposed by the RBI are always proportionate to the gravity of the situation. Being a responsible supervisor, all of the central bank's actions are in the best interest of systemic stability and protection of depositors or customers interest. The RBI will be issuing FAQs on the Paytm issue sometime next week, addressing questions and clarifications which have been raised in the public domain and raised bilaterally with the central bank. The governor also noted that those interested can email the central bank with questions they have, and the same will be addressed in the FAQs. RBI will continue to encourage and support…
