On 31 January, RBI pronounced a rather unusual order that barred Paytm Payments bank (PPBL) from undertaking any banking related activities. Paytm and its likes have been a major reason for the Indian financial services landscape to change. Their technology, user experience and digital forte, created a revolution in access, efficiency and reaching banking to the several million in our country. It also pushed the traditional, archaic banking system to revamp and catch pace. In such a scenario, the RBI’s order comes as a blow to the sector. To begin with, the timing of the order, right before the budget, was not the best. The finance minister laid down a vision for fostering research, innovation and startups but RBI’s action seems just the opposite of it.
order can destabilise the eco system
According to an CNBC article, RBI, on four occasions earlier, had issued warnings to PPBL. First in 2018, on non-compliance related to licensing and other banking related mandatories. This ban was later removed based on Paytm’s compliance. Next was in 2021, when a fine of Rs 1 crore was levied as PPBL submitted false information. The third warning came in 2022 concerning lapses in cybersecurity, KYC, anti-money laundering. RBI banned the bank from onboarding any new customer and mandated an audit by an external firm. As the response by PPBL was insufficient, RBI imposed a penalty of Rs 5.39 crore. These series of non-compliances have forced RBI to issue a one of its kind order that mandates PPBL to seriously rectify its shortfalls and fall in line according to RBI’s rule, or exit the system. The order clearly indicates the ombudsman role in protecting customers.
But India has just now caught up the race on technology intervention in financial services. Such an order will have a huge impact on the ecosystem and can destabilise investors and startups’ confidence. It also raises another question, should RBI treat organisations of all sizes with the same set of rules?
Quality is epitome
While we pride over our ancestral heritage that have stood through centuries, one should drown in shame when new constructions just crumble down. The concern regarding quality has consistently plagued our work environment, not only in the construction industry but also in various other sectors. If the need for quality is not instilled in the world’s largest workforce, then the outcomes would become questionable and the dream of a developed nation would just turn a day dream.
Who is responsible?
Being incharge, owning things and doing what is right are as important as any skill that can be acquired. In a recent incident in Chennai, 500 flat owners of a gated community constructed by Casa Grand, a reputed builder sat in protest as they were shocked to know that their houses were constructed on unauthorised land and could not be registered. It reveals serious lapses in the entire system – an irresponsible construction company, irresponsible bank that granted loans and irresponsible government officials who sanctioned building permission. If only anyone of them had alerted on the issue, the hard-earned money of the common people could have been saved. The lethargic attitude of people in responsibility and the manner in which their actions go unaccountable, can easily affect the ease of doing business.
While we stress on the need for various aspects to become a developed nation, focus on the basics will help build a strong foundation.
