Reacting to RBI’s order for Paytm Payments Bank (PPBL), which was to stop accepting deposits in any customer accounts, wallets, Fasttags, and other instruments after February 29; former managing director of BharatPe, Ashneer Grover, said that the central bank “does not want FinTechs in business”.
What Did His Post Say?
In his latest social media post, Ashneer Grover, former Shark Tank judge came down heavily on RBI and declared the move to be against all Fintech firms and that the decision will kill the sector altogether.
“I don’t understand RBI. Clearly RBI does not want FinTechs in business – of late all regulations / moves are against Fintechs. Such moves will kill the sector altogether,” the post said.
“Startups have been biggest creators of market cap and employment in last decade. Today IIM and IIT are struggling to place people – we as a country cannot afford such overreach! Tom-Tom-Ing @UPI_NPCI to the world and punishing pioneers in the space is pure ‘Doglapan’,” he wrote on X, formerly Twitter.
I don’t understand RBI. Clearly RBI does not want FinTechs in business – of late all regulations / moves are against Fintechs. Such moves will kill the sector altogether. The @FinMinIndia @nsitharaman @PMOIndia need to step in. Startups have been biggest creators of market cap…
— Ashneer Grover (@Ashneer_Grover) January 31, 2024
Why Did He Slam The RBI In His Interview?
In an interview with MirrorNow, Ashneer expressed his concerns, stating that the regulatory stance sends a message that traditional banks are deemed “systemically important,” while fintechs are not accorded the same recognition.
“Seems to be a $20 billion glass ceiling and the moment you hit it it seems the only way to go is down. Structurally we in India are not ready for big start-ups. Over the last 10 to 12 years startups in India have emerged organically, and people in the government are eager to click pictures with founders but in terms of legislation there has been no move,” he claimed.
Adding on, he said, “We have 111 unicorns but none of them is considered systemically important for the economy, but these startups have driven the 6-7.5 percent GDP growth rate that we celebrate. They have brought in maximum FDI in India and created a maximum number of jobs, but see zero legislative support and as they become big you see these public problems.“
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So, What Does The Businessman Believe And Suggest?
Ashneer, the fintech pioneer didn’t mince words when he described Paytm as the “father of all fintechs in India,” a cornerstone that laid the foundation for numerous other ventures, including his own BharatPe, crediting Paytm with popularizing QR code payments and facilitating a seamless flow of money across the nation, benefiting both consumers and merchants alike.
“They (Paytm) introduced and built the behaviours of scanning a QR code to help money flow in India. The ecosystem was built after Google Pay, PhonePe came on the consumer side and BharatPe and Pine Labs came on the merchant side. So for the start-up community, this is sad,” he said.
His criticism of the RBI was scathing. He saw the regulator’s action as an “overreach,” a punitive measure that seemed to convey a message: traditional banks are vital, but fintechs are dispensable, while also arguing that this perspective was rooted in the mindset of the “60-year-olds at the helm” of the RBI, who lacked trust in the younger generation of entrepreneurs, particularly those seen as unconventional or ‘mavericks.’
“This lack of faith is observed among those in power and involved in making regulations in India. Specifically, there is scepticism towards a 40-year-old with a background in the computer or programming domain when it comes to running any system. This sentiment appears to be a manifestation of a broader perspective within the institution,” he said.
Image Credits: Google Images
Feature image designed by Saudamini Seth
Sources: Business Today, Mint, Times of India
Find the blogger: Unusha Ahmad
This post is tagged under: Ashneer Grover, Shark Tank, BharatPe, Paytm, fintech, PPBL, RBI, Fasttags, UPI, FDI, GDP, bussiness, PhonePe
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