Shaktikanta Das said that they have been engaged with the entity for "quite some time". However, he refused to share granular details on the same.

Moneycontrol News February 9, 2024

The Reserve Bank of India's restrictions on regulated entities are always proportionate to the gravity of the situation, said Das during the post monetary policy press conference.

Deputy Governor Swaminanthan Janakiraman said the action against Paytm Payments Bank was a supervisory action for "persistent" non-compliance.

The central bank had on January 31 imposed major business restrictions on Paytm Payments Bank, including accepting fresh deposits and doing credit transactions after February 29, citing supervisory concerns and non-compliance with rules.

Das spoke of a broad framework while being asked about the Paytm Payments Bank issue. He said there is no need to worry about the entire system. "Let me provide some broad guidance on this Paytm issue. There is no worry about the entire system. It is an issue with a specific institution -- a specific payment bank," he said.

Das said that over the last few years, RBI has significantly deepened its supervisory system and approach. "Our emphasis is always on bilateral engagement with the regulated entities with a focus on nudging them for corrective action. Sufficient time is given for undertaking corrective actions," he said.

"When such constructive engagement doesn’t work or the regulated entity doesn’t take effective action, we go for imposing supervisory or business restrictions," Das said, adding that such restrictions are always proportionate to the gravity of the situation.

"RBI is and will continue to support innovation and technology in the financial sector. Let there not be any doubt about RBI’s commitment to promote fintechs, innovation, technology," Das added.