MUMBAI: A group of startup founders have written to RBI governor Shaktikanta Das and FM Nirmala Sitharaman asking the regulator to “reconsider” its decision to impose severe restrictions on Paytm Payments Bank’s operations.
It is rare for companies and its founders to seek such kind of a review by a financial regulator, especially RBI. A letter signed by Innov8 founder Ritesh Malik with the names of 11 others — including Policybazaar’s Yashish Dahiya, MakeMyTrip’s Rajesh Magow and Bharat Matrimony’s Murugavel Janakiraman — has said that RBI’s decision will have “far-reaching and detrimental” consequences for the entire Indian fintech ecosystem.The directive could potentially stifle innovation and entrepreneurial spirit, they said.
“We are particularly concerned about the potential ramifications of the current regulatory directive on Paytm Bank, extending far beyond the immediate impact on the company itself. This action, perceived as overly punitive, could send a negative signal to the global business community… a vibrant fintech ecosystem thrives on regulatory clarity, predictability and a supportive environment. While safeguarding financial stability remains paramount, achieving this objective should not come at the cost of stifling innovation and entrepreneurial spirit,” the founders said in their representation, urging also the Prime Minister to consider their plea. TOI has reviewed a copy of the letter.
RBI’s decision follows lapses in complying with the regulatory framework on KYC and relationship with the parent, including alleged fake compliance reports. On its part, the regulator has been working closely with fintech players to develop an ecosystem for payments and other businesses, and recently issued draft norms for a self-regulatory organisation.
It is rare for companies and its founders to seek such kind of a review by a financial regulator, especially RBI. A letter signed by Innov8 founder Ritesh Malik with the names of 11 others — including Policybazaar’s Yashish Dahiya, MakeMyTrip’s Rajesh Magow and Bharat Matrimony’s Murugavel Janakiraman — has said that RBI’s decision will have “far-reaching and detrimental” consequences for the entire Indian fintech ecosystem.The directive could potentially stifle innovation and entrepreneurial spirit, they said.
“We are particularly concerned about the potential ramifications of the current regulatory directive on Paytm Bank, extending far beyond the immediate impact on the company itself. This action, perceived as overly punitive, could send a negative signal to the global business community… a vibrant fintech ecosystem thrives on regulatory clarity, predictability and a supportive environment. While safeguarding financial stability remains paramount, achieving this objective should not come at the cost of stifling innovation and entrepreneurial spirit,” the founders said in their representation, urging also the Prime Minister to consider their plea. TOI has reviewed a copy of the letter.
RBI’s decision follows lapses in complying with the regulatory framework on KYC and relationship with the parent, including alleged fake compliance reports. On its part, the regulator has been working closely with fintech players to develop an ecosystem for payments and other businesses, and recently issued draft norms for a self-regulatory organisation.
