According to a central bank official on Thursday, the Reserve Bank of India’s (RBI) crackdown on Paytm Payments Bank’s operations resulted from persistent non-compliance with the regulator’s standards. At a press conference held after the central bank’s monetary policy review, RBI deputy governor Swaminathan J stated that the regulatory actions were implemented after allowing the company enough time to comply.

Citing supervisory concerns and rule violations, the RBI ordered Paytm Payments Bank to cease accepting new deposits in its accounts or well-known digital wallets as of March 1. At the same briefing, RBI governor Shaktikanta Das stated, “Enough time is given to non-compliant entities, but action is taken when bilateral talks don’t yield action.”

In the event that a constructive engagement fails or the regulated entity fails to take effective action, Das stated that supervisory or business restrictions would be imposed.

Das also mentioned that the central bank will provide any necessary clarifications regarding the Paytm order next week. As per Swaminathan’s statement, appropriate measures will be implemented to minimise any potential inconvenience to customers. How the central bank intends to proceed needed to be made clear by him. The remarks made by the deputy governor caused Paytm shares to drop by 10% on the National Stock Exchange. At last, the shares had experienced a 9% decline.