PayTM, should it be banned??

 

Ambani'sation

In one of my earlier  article  I wrote about the gameplan the Ambanies put forth. , instead calling Ambanies, better call Ambani, as the other one is as good as for nothing, still spend money for his splendthrift life.

The recent notification of RBI banning PayTM from acquiring customers and related parabanking and small financing activities citing it's FEMA violations, one can naturally expect that people will be confusion about "what's ***k is going on!". These kirana people spend about Rs 500 recently to install sound box and now RBI says no business though it after February.

After the notification, RBI is silent about it's stand. Hope it may clear soon.. It's being reported that the action was taken after a long deliberate studies and steps by RBI ; and if so; the question arises is why RBI is so slow in explaining it's stand. VSS met FM tonclear the mess. Company says there is no known inquiry by ED.

Meanwhile, Hindu reported the efforts of Jio Financials, financing arms of Reliance is in talks with PayTM to acquire it's payment business. Through Ambani rejected the news as speculative, most likely the news can be a scoop. If to believe the news, then we have every right to believe that RBI order is a small part of a large game plan. 

If to see the influence of Vijay Shekhar Sarma(VSS) visa vis Ambani, you know the answers. The latter is a shrewd business man who owns 3% of GDP. If newgen boys like VSS are coming to dethrone his empire, it's natural for him to panic and turn defensive. Reliance is now in a process of generation change. It's handing over it's empire to the 3rd generation. While the high calibre children like VSS enters the business, it's every threat to the nepo kids of Industrialists, who enjoyed the richness for generation. 

ED Case

There is no known ED case against payTM, except few RBI fines. RBI says they have banned the platform as they violated KYC norms and FEMA. In such case, they could have given a temporary stop of 3 months to admit new customers with an opportunity given for corrective action. PayTM should have been asked to share the details of FEMA violated issues to ED. There is no case is known to taken against those culprits who misused the system. Instead it banned the system. If RBI continue to practise this, then they have to ban many  operates here. 

If RBI believes & ED sees a prima facie evidence from the part of promoters to abet such financial irregularities, they could have taken necessary steps to freeze their rights on the  investment made by promoters and debarr from enjoying the fruits of investment both as investor and employee.

Another argument is Chinese connection. If you are not interested to it why you permit it in the first place? Ok, it's done. If so, why cant you put more check than banning it. 

Kirana Stores

Kiran stores are our neighbourhood stores run by mummy-pappa combo or uncle-aunty combo normally. With the advent of recent supermarket few have upgraded themselves into a mini supermarket kind of structure. Many small entrepreneurs remains the same . When malls came, it rand deathknell to many kirana stores who were forced out of business. Besides agriculture , this kirana store employs millions. PayTM appeared to them as a system that empowered millions of small merchants with an easy to use technology to continue their business in this disruptive environment of Malls/Supermarkets. 

Those big fish who violated the rules and broken the nets are roam free. We can expect such blunders more in future also, as it's these people who advised the Government with the novel idea of Demonetisation, that killed many people and put the life of many in hardship.

In Malayalam there is a proverb " Burn the house to kill the rat". I feel RBI did the same.