SEBI Chairperson Madhabi Puri Buch has vowed to prevent any "Paytm-type contamination" in the market, emphasising strict oversight and centralised KYC validation.
According to media reports, “We won’t allow a Paytm-like issue to affect our market. Unlike the banking system, we have a robust KYC Registration Agency (KRA) to prevent such problems from spreading,” Buch stated at an NSE event.
Buch’s remarks follow the Reserve Bank of India’s crackdown on Paytm Payments Bank for KYC violations, which resulted in severe restrictions. She highlighted that SEBI’s uniform KYC mandates, stored centrally by KRAs, ensure that one rogue player can't disrupt the entire system.
Earlier this year, the RBI restricted Paytm Payments Bank from accepting deposits or facilitating transactions due to lapses in KYC processes. Additionally, the Financial Intelligence Unit-India fined Paytm for anti-money laundering violations.
Paytm has also faced scrutiny from SEBI, receiving notices related to employee stock options and related party transactions.
Buch reiterated the importance of maintaining rigorous KYC standards, hinting at further measures to strengthen market integrity.
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