Regulatory compliance not optional for firms, says minister on Paytm crisis

PTI

New Delhi, February 18

The Reserve Bank’s regulatory action against Paytm Payments Bank has drawn the attention of fintech firms to the importance of complying with laws, Minister of State for Electronics and IT Rajeev Chandrasekhar has said.

2 semiconductor plants coming up

• Two full-fledged semiconductor fabrication plants are going to come up soon entailing multi-billion dollar investment, Minister of Electronics and IT Rajeev Chandrasekhar said.
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The minister stressed that regulatory compliance could not be “optional” for companies, rather it was an aspect every entrepreneur must pay full attention to.

Chandrasekhar said the issue of Paytm Payments Bank was a case where a hard-charging and aggressive entrepreneur had failed to realise the need for regulatory compliance, and that no company could get away if it was non-compliant with law.

Any company, be it from India or abroad, big or small, has to abide by the law of the land, the minister asserted amid the unfolding Paytm Payments Bank Ltd (PPBL) crisis.

The RBI has barred the PPBL from accepting new deposits from March 15, and ruled out any review of its action against the company.

Chandrasekhar said the notion that RBI action against the PPBL had unnerved fintechs, was not correct. The politician, entrepreneur and technocrat disagreed that the issue had raised worries about detrimental consequences for the entire fintech industry.

“And this notion that RBI... the regulator’s action against Paytm Payments Bank has rattled fintech is... not a correct characterisation.”

“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,” he said.

Chandrasekhar further said entrepreneurs typically tend to get so sharply focused on what they’re building, that at times, they may lose sight of rules that have been laid down by regulators.

Earlier, the RBI had cited persistent non-compliances and continued material supervisory concerns, for the regulatory action.

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