Will expand existing relationships with third-party banks: Paytm after RBI curbs

Paytm will only be working with or banks, and “completely move” to or bank partners after RBI imposed curbs on Paytm Payments Bank.

Vijay Shekhar Sharma-owned fintech, which pioneered digital transactions in country and cashless payments after demonetisation of 2016, h launched its own Payments Bank in 2017. 

company, which operates under aegis of One97 Communications Limited said it is taking immediate steps to comply with RBI directions, including working with regulator to dress ir concerns as quickly as possible. 

User deposits in savings accounts, wallets, FASTags, and NCMC will not be impacted, Paytm said, ding that users can continue to use ir existing balances.

“ Company works with various banks (not just Paytm Payments Bank), on various payments products…since starting of embargo. We now will accelerate plans and completely move to or bank partners,” Paym said.

company will be no longer be working with Paytm Payments Bank Limited, it stated.

Paytm said it expects action to have a “worst-case” impact of Rs. 300 to 500 crores on its annual EBITDA going forward.

As a corrective measure, Paytm said it will move nodal accounts from Paytm Payments Bank to or banks during this period, before February 29 deline of RBI.

Highlighting next phase of fintech's journey, Paytm parent One97 Communications (OCL) said it will continue to expand its payments and financial services business “only in partnerships with or banks”. 

company will offer acquiring services to merchants along with or partner banks, furr expanding third-party bank partnerships after directive. 

directive will not affect Paytm Payment Gateway business, along with offline offerings like Paytm QR, Paytm Soundbox, Paytm Card Machine.

Gateway business will continue to offer payment solutions to existing merchants, while its offline merchant payment network offerings like QR code and Soundbox can onboard new offline merchants as well. 

Paytm said its or financial services such as loan distribution, insurance distribution and equity broking are not related to Paytm Payments Bank “in any way,” and will hence remain  unaffected by directive. 

company has also rebuffed rumours of margin loans, saying founder Vijay Shekhar Sharma “has reconfirmed to us that he has not taken any margin loans, or orwise pledged any shares that are directly or indirectly owned by him.” 

Paytm Payments Bank Limited is run independently by its management and board, wherein Vijay Shekhar Sharma is a part-time chairman listed by ir website.

“While OCL is allowed to have two board seats on board of Paytm Payments Bank Limited, as a part of its shareholder agreement, OCL exerts no influence on operations of Paytm Payments Bank Limited, or than as a minority board member, and minority shareholder,” company stated.