New Delhi: In a reassuring development for digital payments giant Paytm and its vast user base, recent clarifications from senior government officials have allayed any concerns about the company’s operational integrity and systemic stability within the financial ecosystem.
A Paytm spokesperson stated: “We have consistently assured that neither Paytm nor any of its associates are under investigation by any regulatory agency. This stance has been further validated by recent statements by senior government officials. Our commitment remains unwavering to operate in compliance with regulatory standards, guidance and continuous improvement of our processes to expand the reach of digital payments across India.”
The talk of regulatory scrutiny of Paytm came to light following proactive actions by the Reserve Bank of India (RBI), which some interpreted as indicative of underlying issues. (Also Read: RBI Monetary Policy, February 2024: Central bank keeps interest rate unchanged at 6.5%)
However, the Secretary of Financial Services’ clarification suggests that these measures were preventative, intended to safeguard consumer interests and the broader economic landscape, rather than a reflection of any systemic instability.
Financial Services Secretary Vivek Joshi on Wednesday said it is up to the Reserve Bank to deal with the Paytm issue and the government has nothing to do with the matter for now.
“It is an action taken by the regulator. They regulate the banks. The government has not had anything to do so far as far as the action taken against Paytm is concerned. And we believe that the RBI must have taken the action in the general interest of the consumer and the economy,” Joshi said in an interview.
The dialogue gained additional momentum after Paytm founder Vijay Shekhar Sharma held talks with Finance Minister Nirmala Sitharaman, a meeting in which Joshi, a key figure in the government, was also present. While the details of the discussion remain confidential, the overall message was clear: Paytm’s way forward involves close cooperation with regulatory bodies. (Also Read: RBI Monetary Policy, February 2024: Will RBI keep interest rates on pause? Know what experts say)
Addressing speculations of financial instability sparked by the RBI’s directive on Paytm Payments Bank, Joshi provided reassurance, highlighting the bank’s limited size and dismissing any major concerns over systemic risk.
In a further boost to Paytm’s position, Revenue Secretary Sanjay Malhotra emphasized the absence of current law enforcement and ED actions against Paytm, echoing the company’s denials of any ongoing investigation into its operations or alleged money laundering activities.
As Paytm continues to navigate the regulatory landscape, the statements from government and regulatory officials serve as a testament to the company’s resilience and commitment to maintaining a transparent, secure and inclusive digital payments ecosystem in India.