Startup Founders Appeal to RBI and FM to Reconsider Action Against Paytm Payments Bank

Startup founders, including Policybazaar's Yashish Dahiya and MakeMyTrip's Rajesh Magow, urge RBI and FM to review regulatory action against Paytm.

  • Startup founders, including Policybazaar’s Yashish Dahiya and MakeMyTrip’s Rajesh Magow, urge RBI and FM to review regulatory action against Paytm.
  • RBI directed Paytm Payments Bank to halt customer onboarding and key banking services due to non-compliances and supervisory concerns.
  • Paytm’s parent company clarifies no probe by Enforcement Directorate, as Paytm’s stock faces a 43% fall in three sessions.

A coalition of prominent startup founders has penned a letter to RBI Governor Shaktikanta Das and Finance Minister Nirmala Sitharaman, urging them to reconsider the regulatory measures imposed on Paytm Payments Bank. The founders, including Yashish Dahiya of Policybazaar and Rajesh Magow of MakeMyTrip, expressed concerns about the broader implications of the action against Paytm, emphasizing its potential impact on the fintech ecosystem and the economy at large.

The letter comes in response to RBI’s directive to Paytm Payments Bank to cease onboarding new customers and suspend key banking services after February 29, citing persistent non-compliances and supervisory concerns. While customers with existing balances face no restrictions, the regulatory measures have raised alarm among stakeholders regarding their potential repercussions.

Amidst the regulatory scrutiny, Paytm’s parent company, One97 Communications, clarified that neither the company nor founder Vijay Shekhar Sharma is under investigation by the Enforcement Directorate for Foreign Exchange Management Act violations. However, the crisis has taken a toll on Paytm’s stock performance, with a 43% decline over the past three sessions, signaling investor concerns about the company’s future amidst regulatory challenges.