Start-up founders urge PM Modi, RBI to reconsider Paytm curbs
At least 12 start-up founders have penned a letter to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, and the Reserve Bank of India (RBI) with regards to crisis at Paytm. Per Moneycontrol, the letter requested a re-evaluation of the recent sanctions imposed by the RBI on Paytm Payments Bank. Signatories include Murugavel Janakiraman of Bharat Matrimony, Deepak Shenoy of CapitalMind, Ritesh Malik of Innov8, Vishal Gondal of GOQii, Yashish Dahiya of PB Fintech and Rajesh Magow of MakeMyTrip.
Indian entrepreneurs stand divided on Paytm fiasco
The wider Indian fintech and start-up community has shown a mixed response to the letter, with some founders distancing themselves from the issue, viewing it as specific to Paytm. They are hesitant to challenge the regulator's decision. The letter argued that the sanctions could tarnish India's reputation as a business-friendly nation, potentially deterring investors from entering the market. It said that the "seemingly punitive regulations" levied against Paytm Payments Bank could have "detrimental consequences for the entire Fintech ecosystem."
Letter requests review of RBI's directions
The founders have requested a review of RBI's order, a timeframe for Paytm Payments Bank to address discrepancies, and open dialogue and collaboration. In the wake of RBI's crackdown on Paytm Payments Bank, several public and private sector bank executives are now cautious about partnering with the company. On January 31, RBI placed curbs on Paytm Payments Bank, barring it from accepting new deposits and conducting credit transactions after February 29 due non-compliance issues and supervisory concerns within the bank.
Banks seek clarity on issues related to Paytm
Six senior banking executives have sought clarity on the issues behind RBI's action and are awaiting transparency from One97 Communications Limited (OCL), which operates Paytm. Meanwhile, Paytm founder Vijay Shekhar Sharma has assured that there will be no layoffs as the company continues to engage with RBI and work with other banks for partnership. Paytm has also refuted reports of a potential Enforcement Directorate (ED) investigation into alleged charges of money laundering.
