Union Minister Chandrasekhar on Paytm: ‘FinTech status doesn’t absolve anyone from…’

TLDR: Union Minister Rajeev Chandrasekhar has responded to the Paytm controversy, stating that being a fintech or technology company does not exempt any entity from regulatory oversight. He emphasized that sectoral regulators have the authority to regulate entities within their sectors, and that the Reserve Bank of India (RBI) has the power to regulate Paytm. Chandrasekhar made these comments at the launch of the Digital India Future Labs in New Delhi. The controversy surrounding Paytm began when the RBI barred Paytm Payments Bank Ltd from accepting deposits or top-ups in any customer account after February 29, 2024. However, Paytm CEO Vijay Shekhar Sharma assured users that the app will continue to function as usual beyond that date. The RBI’s action against Paytm followed a comprehensive system audit report and compliance validation report. The Revenue Secretary also stated that the Enforcement Directorate will investigate Paytm Payments Bank if any fresh charges of fund siphoning are found. As a result of the regulatory measures, Paytm expects an impact on its annual operational profit of INR300-500 crore.