In a recent interview to ET Now, the Reserve Bank of India (RBI) Governor Shaktikanta Das said that 80 to 85 per cent of Paytm users won't face disruptions due to the regulatory actions, as their accounts are not linked with Paytm Payments Bank. However, a key deadline looms for the remaining users.
The governor also added that the central bank is unlikely to grant an extension beyond the March 15 deadline provided to Paytm Payment Bank Limited (PPBL). The deadline for users to link their Paytm wallets to other banks is March 15, a date currently maintained by the governor, ruling out any further extensions.
Das said, the RBI aims for safe and steady growth in the financial sector, not hindering fintechs but promoting sustainability. He also added that regulatory actions are directed at specific entities, not the fintechs overall. The focus is on responsible growth to prevent a rapid rise and subsequent crash.
Fintechs are encouraged to grow within regulatory bounds, with the broader financial sector understanding these considerations, he added.
Regulatory actions impact Paytm
The RBI on January 30, 2024 imposed restriction on PPBL from accepting deposits, credit transactions, or top-ups. Governor Das during the interview with ET Now said that the RBI is not against fintechs, this action was specifically against PPBL on a regulated entity, not the broader Fintech sector.
Governor's perspective on Fintech
Das clarified that the RBI supports Fintech innovation and growth. He likened this support to owning a Ferrari but still adhering to traffic rules - innovation with responsibility.
Das mentioned that the decision on Paytm's payment app license lies with the National Payments Corporation of India (NPCI), stating that the RBI has no objection to the app's continuity.
Changes in Paytm's leadership
Following regulatory actions, Paytm Payments Bank witnessed leadership changes. Promoter Vijay Shekhar Sharma stepped down, and the board saw a reshuffle with the inclusion of notable figures from the banking sector.
Economic outlook and growth
Shifting focus to economic growth, Das hinted at a potential GDP growth exceeding 7.6 per cent for the current year, with a good chance of reaching close to 8 per cent. The latest policy has projected a 7 per cent growth for the upcoming financial year.
Inflation and RBI's strategy
Regarding the increase in prices, Das mentioned that the recent inflation figure of 5.1 percent remains 110 basis points higher than the 4 percent target. Despite this, he noted a decreasing trend in inflation and emphasized that the RBI's current priority is achieving a sustainable and lasting reduction to the 4 percent target.
Paytm shares
The shares of Paytm on Thursday at 2:17 pm IST were trading at Rs 403.70, up by 2.67 per cent on BSE.
