FM to meet heads of fintech firms next week

Amid the ongoing problem faced by leading fintech player Paytm, Finance Minister Nirmala Sitharaman has decided to meet heads of financial technology companies next week to persuade them to strictly follow regulatory norms. Paytm Payments Bank Ltd, an entity promoted by One97 Communications Ltd, faced regulatory actions by the Reserve Bank for failure to comply with host of regulatory norms, including Know Your Customer (KYC) guidelines. According to sources, Sitharaman will be meeting CEOs of fintech companies next week to hear their concerns and problems. However, sources said, she will impress upon them the need to abide by regulatory norms as they are dealing with money of individuals.

The meeting is expected to see participation from senior officials of Reserve Bank, finance ministry, Department for Promotion of Industry and Internal Trade, among others. Last week, the RBI advised customers as well as merchants of Paytm Payments Bank Ltd (PPBL) to shift their accounts to other banks by March 15, giving 15 more days to the beleaguered entity to close most of its operations, including deposit and credit transactions.

The earlier deadline was February 29, 2024, which the RBI has extended by 15 days keeping in view the interest of customers (including merchants) of PPBL who may require a little more time to make alternative arrangements in larger public interest. RBI has also directed termination of the 'nodal accounts' of One97 Communications Ltd, which owns the Paytm brand.One97 Communications holds a 49 per cent stake in PPBL but classifies it as an associate of the company and not as a subsidiary.

Speaking to media, Reserve Bank Governor Shaktikanta Das had said the central bank is always supportive of the fintech sector and it is ensuring rapid growth of the sector.Even Financial Services Secretary Vivek Joshi had said that fintech should comply with the regulations as with scale comes responsibility.