India’s Central Bank Doesn’t Get Payments
Tens of millions of merchants have been thrown into chaos by the RBI's decision to freeze Paytm Payments Bank operations.
Vijay Shekhar Sharma, founder and chairman of One97 Communications Ltd.
Photographer: Ruhani Kaur/Bloomberg (2022)
When the Indian monetary authority began giving out restricted banking licenses to a new category of payment facilitators about eight years ago, it should have spared a thought to their orderly resolution — just in case it had to shutter any of them. As the deepening crisis at Paytm Payments Bank Ltd. shows, the regulator didn’t do its homework.
Last week, the Reserve Bank of India barred the institution from any further deposit or credit transaction in customer accounts, wallets or cards after Feb. 29. The logical next step is that the bank’s license will be scrapped, maybe as early as next month.