Jio Financial Services denies claims to acquire Paytm Wallet

Jio clarifies on Paytm: Jio Financial Services, a subsidiary of Reliance Industries, refuted recent speculation about negotiations with Paytm for the acquisition of its wallet business. Dismissing the reports as ‘speculative,’ Jio Financial Services clarified that no such discussions are taking place. The Hindu Business Line had previously suggested ongoing talks between the two entities, intensifying after the Reserve Bank of India's recent measures against Paytm's Payments Bank.

Contrary to the speculative reports, both Paytm and Paytm Payments Bank asserted that they have not engaged in any discussions with Jio Financial Services. The market response to the initial reports was notable, with Jio Financial Services' shares surging over 15 per cent, while Paytm's market cap experienced a decline of more than 40 per cent in the last three business days.

The Reserve Bank of India (RBI) has imposed restrictions on Paytm Payments Bank, preventing it from offering various banking services, including accepting fresh deposits and credit transactions. In response, Paytm announced plans to terminate its business association with the affiliate and seek partnerships with other banks to ensure the continuity of core services.

Last week, reports suggested that the RBI is contemplating additional penalties on Paytm and may revoke its bank permit. Paytm Payments Bank, housing 330 million wallet customers, is grappling with regulatory challenges. Notably, in 2018, when Paytm obtained the Payments Bank license, it had to surrender its PPI license, required for operating the wallet business.

Reliance had listed Jio Financial Services, its non-bank financial subsidiary, last year. With about a 6 per cent stake in Reliance, Jio Financial Services is steadily expanding its presence in the lending and insurance sectors.