Full text of RBI Governor Shaktikanta Das' observations on regulated entities

I would like to make some general observations, not with specific reference to Paytm as such, but some general observations, which includes all our regulated entities. So all our regulated entities does not exclude Paytm, it is applicable to all the regulated entities.

Now, first, is that, over the last few years, as all of you are aware, we have significantly deepened our supervisory systems, approach and methods.

Number two, our emphasis is always on as the deputy governor has pointed out, our emphasis is always on bilateral engagement with the regulated entity and in that engagement, we give focus on and we are completely focused on nudging the regulated entity to take corrective action. Let me rephrase it, our emphasis is always on bilateral engagement with the regulated entities, with focus on nudging them for corrective action and sufficient time is given for undertaking such corrective action.

The third point when such constructive engagement, which we undertake when that does not work so, when such constructive engagement does not work, or when the regulated entity does not take effective action, we go for imposing supervisory or business restrictions.

Number four, such restrictions which we impose are always proportionate to the gravity of the situation, please take note that such restrictions are proportionate to the gravity of the situation.

Number five, all our actions being a responsible regulator, being a responsible supervisor, all our actions are in the best interest of systemic stability and protection of depositors or customers interest. These aspects cannot be compromised.

Individual entities should be mindful of these aspects for their long-term success.

Number six, over the last few days, we have received a lot of queries, clarifications from various quarters including members of the public, you have raised a few questions today. So, we have noted all these questions and clarifications which have been sought from us and based on that, we will be issuing a FAQ sometime next week.

So, that should address all these questions and clarifications which are being raised by you and which have been raised in the public domain and raised bilaterally with us from various quarters.

Number Seven finally, and emphatically let me stress and let me emphatically state that the Reserve Bank is and will continue to encourage and support innovation and technology in the financial sector. Let there not be any doubt about Reserve Bank's commitment to promote fintechs, to promote innovation, to promote technology in the financial system.

Shares of Paytm are locked in a 10% lower circuit at ₹446.65.