Regulatory Compliance Not Optional, Prioritize It: Union Minister Rajeev Chandrasekhar On RBIs Action On Paytm

New Delhi: In light of recent regulatory actions against Paytm Payments Bank by the Reserve Bank of India (RBI), Union Minister Rajeev Chandrasekhar has emphasized the importance of strict adherence to laws for fintech firms. The minister, who serves as the Minister of State for Electronics and Information Technology, stressed that regulatory compliance should never be considered optional for companies operating in the sector.

What Rajeev Chandrasekhar Has Said?

Speaking in an interview with PTI, Chandrasekhar highlighted the case of Paytm Payments Bank as a reminder that compliance with regulations is non-negotiable. (Also Read: WATCH: Man Turns Plane Into Luxurious Villa; Viral Video Amazes Anand Mahindra)

He underscored that regardless of a company’s size or origin, it must abide by the laws of the land. The recent actions against Paytm Payments Bank, including the prohibition on accepting new deposits starting March 15, serve as a stark reminder of this principle. (Also Read: Apple iPhone 15 Pro Gets Rs 38,962 Price Cut: Check Bank And Exchange Offers)

Chandrasekhar pointed out that while entrepreneurs often focus intensely on building their businesses, they must not overlook regulatory requirements set by authorities.

He characterized the failure to comply with regulations as a common flaw among entrepreneurs, emphasizing the need for a thorough understanding of regulatory frameworks.

Paytm Payments Bank Under Scrutiny

Paytm Payments Bank, an associate of One97 Communications Limited, has been under scrutiny due to persistent non-compliance issues cited by the RBI.

The central bank has advised customers and merchants of the bank to transition their accounts to other institutions by March 15. Despite this, certain Paytm services such as QR codes and POS terminals are expected to remain operational if linked to alternative banks.

Response From One97 Communications

In response to the regulatory actions, One97 Communications, the parent company of Paytm, announced the transfer of its nodal account to Axis Bank. This move aims to ensure the continuity of services beyond the March 15 deadline set by the RBI.

Government’s Stance On Regulatory Compliance

Chandrasekhar reiterated the government’s position on regulatory compliance, emphasizing that all entities in the digital economy, whether domestic or international, must adhere to the rules laid down by regulators.

In the fintech space, the RBI serves as the primary regulatory authority, and compliance with its directives is paramount.

Background Of Rajeev Chandrasekhar

Chandrasekhar, an engineer by qualification, has extensive experience as an entrepreneur, having founded and led various ventures in the technology and telecommunications sectors.

He emphasized his own journey as an entrepreneur, acknowledging the tendency to prioritize business growth over regulatory compliance.