Entrepreneurs request that RBI examine restrictions on Paytm

MUMBAI: A group of startup entrepreneurs have written to FM Nirmala Sitharaman and RBI governor Shaktikanta Das, requesting that the regulator “reconsider” its decision to place stringent limitations on the activities of Paytm Payments Bank.

Companies and their founders seldom ask for this sort of evaluation from a financial regulator, particularly the RBI. Innov8 founder Ritesh Malik and 11 other signatories, including Yashish Dahiya of Policybazaar, Rajesh Magow of MakeMyTrip, and Murugavel Janakiraman of Bharat Matrimony, wrote a letter stating that the RBI’s decision will have “far-reaching and detrimental” effects on the entire Indian fintech ecosystem.They said that the instruction may discourage creativity and an entrepreneurial spirit.
“We are especially worried about the possible consequences of the present regulatory order on Paytm Bank, which go far beyond the direct effects on the business. This move, which is seen as too harsh, would send a bad message to the world’s business sector. A thriving fintech sector depends on predictable regulations, clear guidelines, and a welcoming atmosphere. Assuring financial stability is still a top priority, but doing so shouldn’t come at the expense of stifling creativity and an entrepreneurial spirit, the entrepreneurs pleaded with the Prime Minister in their message. A copy of the letter has been examined by TOI.
The RBI made its judgment in response to purportedly fraudulent compliance reports as well as violations of the regulatory framework pertaining to KYC and the parent company connection. In order to create an ecosystem for payments and other businesses, the regulator has been collaborating closely with fintech companies. Recently, draft standards for a self-regulatory organization were released.