Finance Minister Nirmala Sitharaman and RBI Governor Shaktikanta Das arrive for a customary post-Budget meeting with the central board of directors of the RBI, in New Delhi on Monday | Photo: PTI
Reserve Bankof India (RBI) Governor Shaktikanta Das on Monday firmly dismissed any possibility of a review of the central bank’s action against Paytm Payments Bank.
He stated that the decision was taken after a comprehensive assessment of the firm’s operations.
“If you are expecting a review of the decision, let me very clearly say: There is no review of the decision. FAQ (frequently asked questions) which we are proposing to issue will target the issues faced by customers like the FASTAG users, the wallet users, and the account holders. A review of the decision is not on the table. Don’t expect a review in the FAQ (to be issued this week),” said Das, while interacting with the media after a meeting of the central board of directors of the RBI.
“When we make a decision, we discuss all pros and cons, and all angularities are examined. Decisions are not taken in a casual manner. A decision is taken in the most serious manner in public interest,” he further said.
On January 31, the RBI announced its decision to shut down most of Paytm Payments Bank’s operations, including deposits, fund transfers, and its popular digital wallets, effective from March 1, 2024, because of “persistent non-compliances and continued material supervisory concerns”.
Das expressed the RBI’s support for the fintech sector and its desire for the sector to thrive.
“The fintech sector has an important role because millions of customers come to that platform and keep money in their (fintech firms’) wallet. Customer interest and financial stability are of prime importance. If you are operating in a regulatory environment, you have to abide by some regulations to run the business,” he said.
Govt on path of fiscal consolidation, says Das
Union Finance Minister Nirmala Sitharaman addressed the RBI central board of directors in the customary post-Budget meeting. The directors praised the finance minister on the Budget and shared their views. “The board also reviewed the global and domestic economic situation and outlook, including the challenges posed by geopolitical developments and global financial market volatility,” an RBI statement said.
Das, during the media interaction, said that the borrowing has been kept under certain limits as the government has embarked on a path of fiscal consolidation “Lower quantum of borrowing will basically mean two things. One, it would ensure that because of the lower quantum of borrowing, that more resources are left in the banking system to meet the requirements of the private sector. That would mean a growth-inducing measure,” he said.
The RBI governor further said lower borrowing will have a positive impact on bond yields. “The quantum of borrowing is very important for monetary policy and it will help to moderate the inflation level. As inflation has started moderating, now going forward when interest rate moderates, logically bond yields should soften and borrowing cost of government also should come down,” he added.
First Published: Feb 12 2024 | 9:36 PM IST