Reserve Bank of India (RBI) said that it's the duty of a responsible regulator to protect the interests of consumers and financial stability. RBI Governor Shaktikanta Das was responding to questions on the action against Paytm Payments Bank.
Addressing reporters post the monetary policy statement, Das said that any action by the regulator is preceded by extensive bilateral engagement with the entities. He said, "The focus is on nudging the entity to take corrective actions. However, if such constructive engagement does not work, then we go for supervisory restrictions."
For the unversed, RBI asked Paytm Payments Bank on January 31 to stop accepting new deposits after February 29, dealing a blow to Paytm's business. Stocks of the firm fell by over 40 per cent in three days before recouping some of the losses on the back of block deals. On 8 February, the share was trading at Rs 454.70 at the time of publishing, down 8 per cent from the previous close.
Also Read | Why RBI Banned Paytm Payments Bank And What It Means For Paytm's Future
To provide more clarity on the action, Das said that the central bank will issue a detailed FAQ some time in next week. Paytm CEO Vijay Shekhar Sharma had earlier said that the company is in touch with RBI to resolve the issue.
While the central bank has provided context of the action, it has not clarified whether more restrictions can be imposed on Paytm Payments Bank. Some reports had suggested that RBI may cancel the licence of Paytm Payments Bank soon over alleged non-compliance with regulations.
