RBI action on Paytm Payment Bank in interest of consumers and Indian Economy: Financial Services Secretary

In an interview with Moneycontrol on Tuesday, Joshi stated that the matter, involving the company and the central bank, must be resolved at that level.

The Reserve Bank of India (RBI) started a major crackdown on Paytm Payments Bank, citing complete neglect by the company for regulatory standards and compliance requirements, media reports said.

This has raised major concerns regarding both the promoters' and the group's commitment to transparency, Moneycontrol reported quoting a source familiar with the matter.

"What can I say about Paytm? It is an action taken by the regulator. They regulate the banks," Joshi was quoted as saying by Moneycontrol.

"The government has had nothing to do until now when it comes to the actions taken on Paytm. And we believe that the RBI must have taken the action in the overall interest of the consumer and the economy," he added.

Joshi's comments follow Paytm founder Vijay Shekhar Sharma’s meeting with Finance Minister Nirmala Sitharaman.

Joshi did not reveal the discussion in the meeting, the report said.

"I was there in the meeting yesterday with the finance minister. But I can't reveal what was discussed as it is a privileged conversation. The sum and substance is that you (Paytm) have to deal with the regulator."

Joshi told Moneycontrol that RBI’s restrictions on Paytm Payments Bank will not lead to financial stability due to its small size and as such, there were no systemic risks.