The popular service was found to have failed to comply with the law in India, where it is popular.
Popular mobile payments service provider, Paytm Payments Bank, is at the heart of a controversy in India, where it is highly popular. The company has been accused of failing to realize the need to comply with legal regulations.
Union minister Rajeev Chandrasekhar said no company can get away with such actions.
The union minister was making reference to the Reserve Bank of India’s regulatory action on the mobile payments and financial services company. According to Chandrasekhar, complying to regulations cannot be “optional” for companies. Instead, it must be carefully considered and followed, he said.
According to Chandrasekhar, the Reserve Bank of India’s regulatory action has placed the spotlight on how important it is for fintech companies to be compliant with laws and regulations. The Reserve Bank of India is the country’s central bank and has now banned Paytm from accepting new deposits as of March 15. Moreover, it has said that it will not be reviewing this decision.
The penalty against the mobile payments and banking company was due to non-compliance.
The Reserve Bank of India said that its decision to take action against the company was the result of the company’s persistent non-compliance and concerns regarding material supervision. According to Chandrasekhar, fintechs haven’t been rattled by the Reserve Bank of India’s action against Paytm.
“And this notion that RBI… the regulator’s action against Paytm Payments Bank has rattled fintech is… I don’t think that’s a correct characterization,” he said. “I think it has drawn the attention of fintech entrepreneurs, to the fact that you also have to know how to comply with the law. Regulatory compliance is not an optional thing for any country in the world, certainly not in India, and it is something that they (entrepreneurs) should pay more attention to.”
The Paytm Payments Bank and mobile payments company is a One97 Communications Limited associate. One97 Communications Limited currently holds 49 percent of the company. The remaining 51 percent of the bank is owned by the company’s founder and CEO Vijay Shekhar Sharma.
