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RBI Vs Paytm Payments Bank: Shockwaves In The India’s Fintech Ecosystem

Inc42 · 1y ago

RBI Vs Paytm Payments Bank: Shockwaves In The India’s Fintech Ecosystem

Fintech stakeholders are calling for a more balanced approach and increased transparency from regulatory authorities to prevent erosion of value and investment. The recent ban on Paytm Payments Bank by the Reserve Bank of India (RBI) has highlighted regulatory challenges and concerns over stifling innovation. Startups have been impacted by various RBI policies, resulting in closures and lost investments. There is a lack of transparency in RBI actions, leaving fintech companies uncertain about compliance requirements. Investors are reevaluating their investment strategies in the fintech sector due to regulatory uncertainty.

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Axis Bank Saves The Day As Paytm Shifts Nodal Account Post RBI’s Refusal To Extend Deadline

Inc42 · 1y ago

Axis Bank Saves The Day As Paytm Shifts Nodal Account Post RBI’s Refusal To Extend Deadline

Fintech major Paytm has shifted the nodal account of Paytm Payments Bank to Axis Bank, ensuring seamless merchant settlements. The move comes after the Reserve Bank of India (RBI) refused to extend the deadline for termination of the nodal accounts of Paytm Payments Bank. RBI extended the deadline for business restrictions to March 15 from February 29. Paytm's shares saw a massive selloff after the directive, but closed 5% higher at INR 341.50 on Friday.

FM Nirmala Sitharaman Meets Fintech Startups, Underlines Need For Compliance

Inc42 · 1y ago

FM Nirmala Sitharaman Meets Fintech Startups, Underlines Need For Compliance

Finance Minister Nirmala Sitharaman held a meeting with fintech startups to discuss compliance with regulations and consumer protection. The meeting included representatives from the Reserve Bank of India, various government departments, and fintech founders. Sitharaman suggested that the RBI should have monthly meetings with fintech startups to address any issues. Concerns relating to KYC compliance, cybersecurity, and foreign direct investment were discussed. The meeting was seen as an attempt to alleviate concerns within the fintech ecosystem following regulatory actions against Paytm Payments Bank. Fintech continues to be a significant sector in the Indian startup ecosystem.

Paytm shares hit fresh record low, down 24% this week alone

Economic Times

Economic Times · 1y ago

Paytm shares hit fresh record low, down 24% this week alone

Shares of Paytm, the fintech company, fell to a new record low of Rs 318.05 on NSE, losing about 24% of its market value in a week. The RBI ban on Paytm Payments Bank has impacted the company's business, and the road tolling authority has advised users to buy FASTags from authorized banks excluding Paytm Payments Bank. The Enforcement Directorate has initiated an inquiry against Paytm Payments Bank. RBI Governor Shaktikanta Das stated that there will be no review of the decision on Paytm Payments Bank. Experts suggest retail investors stay away from the stock until regulatory hurdles are resolved. Macquarie predicts the stock could slump to Rs 275.

RBI not against any fintech; they are free to grow: Governor Shaktikanta Das

Economic Times

Economic Times · 1y ago

RBI not against any fintech; they are free to grow: Governor Shaktikanta Das

In a recent interview, Reserve Bank of India (RBI) Governor Shaktikanta Das clarified that the RBI is not against fintech companies and actually wants them to grow. He emphasized that recent actions taken by the bank were targeted at regulated entities, not fintechs. This statement comes in the wake of penalties imposed on Paytm Payments Bank for non-compliance and supervisory concerns. The RBI is taking measures to prevent financial mishaps while ensuring sustainable growth in India's financial sector. Some customers of Paytm Payments Bank have already started shifting to other banks.

SBI happy to welcome merchants looking to shift from Paytm bank: Dinesh Khara

Economic Times

Economic Times · 1y ago

SBI happy to welcome merchants looking to shift from Paytm bank: Dinesh Khara

State Bank of India (SBI) is offering support to merchants following regulatory action against Paytm Payments Bank. SBI Chairman Dinesh Khara stated that the bank is reaching out to merchants and is open to a one-time migration of accounts from Paytm. SBI Payments, a company that supports various payment systems, aims to ensure there are no disruptions in the payments ecosystem. The Reserve Bank of India (RBI) recently directed Paytm Payments Bank to halt basic payment services due to violations of rules, including KYC requirements. Paytm is reportedly in talks with HDFC Bank, Axis Bank, and Yes Bank to transfer its payments and settlements load.

Everything About Paytm's Crisis

Inc42 · 1y ago

Everything About Paytm's Crisis

The Indian fintech company Paytm has seen a significant drop in its shares following actions taken by the Reserve Bank of India (RBI). The RBI has barred Paytm Payments Bank from accepting deposits, credit transactions, or top-ups in customer accounts. It has also stopped the bank from providing other banking services, such as UPI facility and fund transfers, after February 29, 2024. Paytm has experienced a decline in its shares, reaching an all-time low on the stock exchange. The company's competitors, including HDFC Bank, PhonePe, and Google Pay, have made efforts to convince Paytm merchants to switch to their platforms. The Enforcement Directorate has been investigating lapses at Paytm, and there have been reports of forex violations against Paytm Payments Bank. Paytm shares have faced consecutive declines, prompting the company to meet with the RBI officials and seek resolutions.

Paytm To Move Its Point Of Sale Terminals To RBL Bank

Inc42 · 1y ago

Paytm To Move Its Point Of Sale Terminals To RBL Bank

Fintech company Paytm plans to transfer its point of sale (PoS) terminals, used for processing card payments at merchant establishments, to RBL Bank. The parent company, One 97 Communications, will continue to operate and manage the terminals under the Paytm brand, while transaction processing will be handled by RBL Bank. This move follows Paytm's recent shift of its nodal account to Axis Bank after the RBI barred Paytm Payments Bank from certain activities. Paytm also recently obtained a TPAP license from the National Payments Corporation of India.

85% Paytm wallet users not to face disruption; rest asked to link wallet to other banks: RBI Guv

Economic Times

Economic Times · 1y ago

85% Paytm wallet users not to face disruption; rest asked to link wallet to other banks: RBI Guv

RBI Governor Shaktikanta Das has stated that around 80-85% of Paytm wallet users will not face any disruption due to recent regulatory actions. The Reserve Bank of India (RBI) had barred Paytm Payments Bank Ltd (PPBL) from certain activities and set a deadline of March 15 for users to link their wallets to other banks. The governor emphasized that the RBI supports innovation in the fintech sector and clarified that the regulatory action was directed at PPBL, not fintech companies in general. The National Payments Corporation of India (NPCI) is expected to make a decision on the Paytm payment app license soon. Das also expressed optimism about India's economic growth surpassing the projected figures.

Six Mutual Funds Fully Exit Paytm Stock, Six Reduce Stake Sharply In February

Inc42 · 1y ago

Six Mutual Funds Fully Exit Paytm Stock, Six Reduce Stake Sharply In February

Paytm, the Indian fintech company, is facing divestment by several mutual fund companies following regulatory interventions by the Reserve Bank of India (RBI). Six mutual funds have completely divested their holdings in Paytm in February, while six others significantly reduced their stakes. The divestment comes after the RBI barred Paytm Payments Bank from various banking services due to non-compliance issues. As a result, 18 mutual funds now hold Paytm shares worth INR 1,426 crore, down from INR 3,384 crore in January. The National Payments Corporation of India is expected to grant Paytm a third-party application provider license by March 15.

A year of reckoning for Indian fintech startups as RBI tightens the rules

YourStory

YourStory · 8m ago

A year of reckoning for Indian fintech startups as RBI tightens the rules

The Indian fintech ecosystem, despite its rapid growth and innovation, has faced significant challenges, including a 334% rise in internet and card-based fraud in FY24. Regulatory measures, like those against Paytm Payments Bank for KYC non-compliance, stressed the importance of adherence. The RBI also tightened rules for P2P lending platforms, impacting startups like LenDenClub. Meanwhile, new self-regulatory initiatives aim to enhance compliance and foster a safer, transparent fintech environment.

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