India's famous fintech company Paytm is in the headlines these days. A major reason behind this is the ban on its banking services by RBI. Every day statements are being given by different stalwarts regarding this. The effect of all this is also visible on the company's stock, which has fallen by more than 40 percent in the last few days. Whenever any issue related to India's economic scenario comes up, Raghuram Rajan is remembered. Do you know that Paytm is facing crisis today. It was Raghuram Rajan who once gave the green signal to it. Let us turn the page of history.
Raghuram Rajan had given license to Paytm.
Former RBI Governor Raghuram Rajan has already warned about innovations that violate the regulatory body. He further says that Paytm was one of the top contenders to revolutionize innovation in India's banking system. He says that RBI had issued licenses to the applicants through a discussion paper in August 2013, realizing the special banking needs in India. Paytm founder Vijay Shekhar Sharma was among the 11 applicants who were given approval by the RBI to set up a payments bank in August 2015. Paytm Payment Bank is a branch of One97 Communications Limited (OCL), which holds 49 percent stake. Sharma holds 51 percent stake in the bank. Let us tell you that Raghuram Rajan has served as the 23rd Governor of RBI from September 2023 to September 2016.
These groups did not do business even after getting licenses
He says that among those 11 applicants, Vodafone's MPaisa, Aditya Birla Money and Tech Mahindra did not enter this business despite obtaining their bank licenses. We are betting on payment banks. Paytm is an innovative firm and innovative companies are not always comfortable with regulators, but we want to see where they push the system and that's why they have a payments bank license.
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According to the ET report, some of the complaints against Paytm include violation of banking compliance norms on money laundering, conflict of interest, maintaining an arm's length from the parent company, lax processes allowing fraud and violation of licensing agreements.
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