TV Mohandas Pai weighs in on the RBI's clampdown on Paytm Payments Bank

TV Mohandas Pai, Chairman of Aarin Capital, says the Reserve Bank of India (RBI) has been fair in its dealings with Paytm Payments Bank, as the central bank has provided adequate time, of over 22 months, to Paytm Payments Bank to comply with its regulations.

"There have been multiple audits, multiple visits, multiple reports, including by third party audits, and in case Paytm Payments Bank is not able to comply despite all this and despite repeated warnings, they should face regulatory action," Pai said reacting to the RBI's comments on Paytm Payments Bank during the monetary policy announcement earlier today.

"Don't forget, they (RBI) asked razorpay to stop onboarding new customers. They asked HDFC Bank to stop onboarding new customers. So RBI has been extremely consistent, and they're given adequate time to Paytm Payments Bank," Pai added.

In the post policy press conference on February 8, RBI Deputy Governor Swaminathan J said the action on Paytm Payments Bank is a supervisory one on a regulated entity over persistent non-compliance. He said such actions are preceded by months or years of bilateral engagement and that regulated entities (in this case Paytm Payments Bank) are provided enough time to take corrective action so as to protect consumers and financial stability of the system.

Pai believes no company should consider themselves above the law. The regulations and system remain the same for all companies and no one can expect a special dispensation.

He believes that, at the moment, investors can only move or step aside and wait for February 29.

"I don't think the language of the press conference leaves you with any scope or an extension on this deadline, whatever has to happen has to happen within the next 20 odd days."