After the Reserve Bank of India (RBI) imposed major business restrictions on Paytm Payments Bank following persistent non-compliance and continued material supervisory concerns, Ashneer Grover -- former founder of fintech firm BharatPe -- on Wednesday said that the central bank's move was against the interest of fintech firms.
He further called upon finance minister Nirmala Sitharaman and Prime Minister Narendra Modi's office to look into the matter.
"I don’t understand RBI. Clearly, RBI does not want fintechs in business. Of late all regulations/moves are against Fintechs. Such moves will kill the sector altogether," Ashneer Grover wrote on X. "Startups have been the biggest creators of market cap and employment in the last decade. Today IIM and IIT are struggling to place people -- we as a country cannot afford such overreach! Tom-tom-ing UPI to the world and punishing pioneers in space is pure ‘Doglapan’!"
The RBI on Wednesday restricted Paytm Payments Bank from accepting fresh deposits and doing credit transactions after February 29.
On March 11, the RBI barred Paytm Payments Bank from onboarding new customers.
The central bank said a Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.
No further deposits or credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29 other than any interest, cashbacks, or refunds which may be credited anytime, the RBI said.
The RBI, however, clarified that the withdrawal or utilisation of balances by the lender's customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. are to be permitted without any restrictions.
Read more: RBI action on Paytm Payments Bank: Key details you must be aware of
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