Paytm has a smell-test problem

The “smell test” serves as a tool for financial regulators to extract market intelligence on entities. Employing a blend of common sense and seasoned experience, this seeks to identify any unusual activities or deviations from regulatory norms. In a crisis, the scrutiny of the smell test becomes notably more rigorous. Paytm has just proved a fundamental principle: no entity, regardless of size or prominence, is immune to regulatory oversight.

Fintech giants like Paytm must recognise that equity strength and market dominance do not exempt them from the stringent rules that govern financial operations, nor does claiming regulatory ignorance. Innovation should not come at the cost of compromising the regulatory system that upholds the integrity of the financial system.