New Delhi, The Reserve Bank of India (RBI) has directed Paytm Payments Bank, a subsidiary of Paytm, to halt new deposits after February 29. The Congress has raised concerns about the government’s failure to monitor Paytm’s Chinese links, pointing to a history of penalties and ownership.
Congress general secretary Jairam Ramesh stated on X, “Why has a firm with Chinese links, facing penalties in 2022, not been kept under stricter monitoring?” He questioned the government’s role in allowing a company with significant Chinese ownership to operate without scrutiny.
The largest shareholder of Paytm, Vijay Shekhar Sharma, holds 19.42%, with China’s Antfin having 13.5% ownership. Congress connects this to the government’s negligence and questions whether Paytm’s support for demonetization in 2016 played a role.
In 2022, RBI directed Paytm Payments Bank to halt customer additions due to non-compliance. The recent directive instructs the bank to stop new deposits without specifying a review timeline. Paytm expects a worst-case impact of ₹300 to 500 crore on its annual earnings.
Congress MP Ramesh criticized the Modi government, stating, “The last 10 years under PM Modi have brought only chaos to the banking system.” He highlighted demonetization, IL&FS bankruptcy, and scams at Yes Bank and DHFL, blaming the government for the financial turmoil.
Paytm has pledged to comply with RBI’s directions immediately, anticipating the impact on its annual earnings. The RBI’s move has triggered discussions about the government’s oversight of financial institutions with foreign investments, particularly those with Chinese connections.
