Days after the Paytm crisis intensified, a group of start-up founders has written to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and the Reserve Bank of India, urging a review of the regulator’s directive ordering the cease of its major banking services.

According to the reports, the key founders such as Yashish Dahiya of Policy Bazaar, Deepak Shenoy of Capital Mind, Murugavel Janakiraman of Bharat Matrimony, Rajesh Magow of MakeMyTrip, and Ritesh Malik of Innov 8, among others were the signatories of the letter.

The letter has requested that the government allow a reasonable timeframe for Paytm Payments Bank to identify deficiencies and implement rectifications.

“Restrictive regulations could hinder financial inclusion, curb economic development, and compromise India’s competitiveness on the global stage,” the letter said.

They argued that actions taken against Paytm Payments Bank might deter potential investors from entering the Indian market due to stringent regulatory requirements.

“The recent years have seen commendable initiatives like the Ease of Doing Business reforms, aimed at attracting foreign investment and promoting domestic entrepreneurship. However, excessively stringent regulations targeting leading fintech innovators such as Paytm Payments Bank could convey a message of inconsistency and unpredictability, potentially deterring other prospective investors and innovators from entering the domestic market,” the letter stated.

In a bombshell development for the fintech giant Paytm, the RBI on January 31 announced that no further deposits, credit transactions, or top-ups will be permitted in customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Card (NCMC) cards etc after February 29, 2024, except for interest, cashback, or refunds that may be credited at any time.

Speaking on the development, Paytm founder Vijay Shekhar Sharma had promised the app users that it will keep functioning even after February 29.

“I, with every Paytm team member, salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance,” he said.

“India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it,” he said, expressing the future prospects working towards continuous advancement in the fintech sector.