Indian startup founders urge PM Modi, FM, RBI to reevaluate sanctions on Paytm
Indian startup founders urge PM Modi, FM, RBI to reevaluate sanctions on Paytm
A group of at least 12 startup founders has written a letter to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI), urging a reconsideration of recent sanctions on Paytm.
The founders, including prominent names like Murugavel Janakiraman, Deepak Shenoy, Ritesh Malik, Vishal Gondal, Yashish Dahiya and Rajesh Magow, highlighted concerns over the potential detrimental consequences for the Fintech ecosystem.
The letter expressed apprehensions that the strict regulations imposed on Paytm Payments Bank could negatively impact India’s image as a business-friendly nation. It emphasized the need for a balanced approach and open dialogue to address the issues rather than excessively punitive measures.
While some in the startup ecosystem chose not to sign the letter, seeing it as a Paytm-specific issue, the founders stressed the importance of safeguarding the interests of customers and merchants affected by the sanctions. The letter called for a review of RBI’s regulatory directions, a reasonable timeframe for rectification and reassessment of the proportionality of restrictions.
The RBI recently took stringent actions against Paytm Payments Bank, citing regulatory non-compliance, leading to concerns about the company’s image and potential investigations by authorities like the Enforcement Directorate.
Paytm founder Vijay Shekhar Sharma assured there would be no layoffs and expressed a commitment to working with RBI to address the identified deficiencies.
Amidst the regulatory challenges, Paytm is seeking bank partnerships to migrate its accounts from Paytm Payments Bank Limited, while several banking executives are hesitant to engage until there is clarity and transparency regarding the issues behind the RBI’s actions.
Rajeev Chandrasekhar, Minister of State for Electronics and Information Technology affirmed the RBI’s authority in regulating entities within the sector, emphasizing the importance of regulatory oversight.
