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New Delhi, Confederation of All India Traders (CAIT) on Saturday appreciated the decisive action taken by the Reserve Bank of India (RBI) in canceling the license of Paytm Payments Bank Limited (PPBL) and demanded an investigation into the matter.
This firm regulatory intervention is in the broader public interest and will help safeguard the hard-earned savings of millions of Indians who trusted the institution with their money, the industry body said in a statement.
CAIT Secretary and BJP MP Praveen Khandelwal said the RBI decision reflects the seriousness of repeated regulatory non-compliance, governance failures and continued disregard of supervisory instructions.
It is noteworthy that RBI had already imposed major restrictions on the banking operations of Paytm Payments Bank in 2024. However, despite earlier warnings and remedial opportunities, the institution has failed to adequately address significant concerns, leading to the current action.
Khandelwal appreciated the RBI’s assurance to depositors that their money will be safe and will be returned as per due process.
“This assurance is especially important for the millions of small merchants, shopkeepers, street vendors, hawkers, self-employed individuals and women entrepreneurs who are extensively using Paytm for daily payments and digital transactions,” he said.
CAIT had earlier cautioned that any regulatory action on Paytm Payments Bank could cause financial inconvenience and transaction disruption to the large number of micro and small users dependent on the platform.
Therefore, it has urged the authorities to ensure a smooth transition mechanism so that such users do not face unnecessary hardship, the industry body said.
CAIT national president BC Bhartia demanded a comprehensive investigation into the management, storage and location of the huge financial and consumer data collected through Paytm’s platforms over the years.
The RBI on Friday canceled the license of Paytm Payments Bank Ltd (PPBL) citing failure to comply with the regulatory conditions prescribed under its payments bank license. The Central Bank said that the entity would no longer be allowed to conduct banking operations and announced that it would approach the High Court to initiate the process of winding up the bank.
According to Paytm’s parent company One97 Communications Limited, the company does not have PPBL or any significant business arrangement with PPBL.
“None of the services provided by the company are in partnership with PPBL. Additionally, PPBL operates independently, with no board or management of the company. There is no direct financial impact on the company, as previously reported, the company had already lost its investment in PPBL by March 31, 2024,” according to the company’s exchange filing.
Paytm and its services, which are running without any interruption, will continue to run uninterrupted. This includes Paytm App, Paytm UPI, Paytm Gold and all other services offered by its subsidiaries and affiliates such as Paytm QR, Paytm Soundbox, Paytm Card Machine and Paytm Payment Gateway, Paytm Money.