Business
Govt urges RBI to issue FAQs for Paytm users
By - 09 Feb 2024 09:01 PM
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“The action against Paytm should be followed up by some sort of clarification. RBI has been urged to bring in FAQs as many customers won't be aware of many issues,” an official said. Given the broad customer base of Paytm — India’s biggest fintech that has a wide presence among both individual users and merchants — the government is learnt to have nudged the Reserve Bank of India (RBI) to issue a follow-up clarification in the form of frequently asked questions (FAQs). “The action against Paytm should be followed up by some sort of clarification. RBI has been urged to bring in FAQs as many customers won’t be aware of many issues,” an official said. Onboarding of customers without proper verification of know-your-customer (KYC) norms is learnt to have been one of the key issues for prompting the action by the RBI against Paytm last week. The RBI had taken action in the form of imposing penalty against Paytm Payments Bank last year and even then the issue did not get resolved, so the action by the RBI this time around is unlikely to be rolled back, the official said. On Tuesday, Paytm founder and CEO Vijay Shekhar Sharma had met Finance Minister Nirmala Sitharaman and RBI officials, days after the regulator imposed a ban on Paytm Payments Bank (PPBL). On January 31, the RBI barred Paytm Payments Bank from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, FASTags and NCMC card after February 29, 2024, in the wake of persistent non-compliances and material supervisory concerns. The crackdown on PPBL came after a comprehensive system audit report and subsequent compliance validation report of the external auditors, the RBI had said. The RBI had directed that the Nodal Accounts of One97 Communications Ltd (OCL), which owns Paytm, and Paytm Payments Services Ltd are to be terminated at the earliest, in any case not later than February 29, 2024. Paytm Payments Bank has been facing RBI scrutiny since 2018. The RBI’s recent action on PPBL came after it was found that the bank had violated KYC norms and also had linked the same PAN to multiple customers. It was also observed that the bank was allowing transactions above the permissible limit, which raised concerns over money laundering. |
