Paytm founder and CEO, Vijay Shekhar Sharma, held discussions with Finance Minister Nirmala Sitharaman and Reserve Bank of India (RBI) officials on Tuesday, in the aftermath of the regulator’s recent ban on Paytm Payments Bank (PPBL).
Describing the meeting with the Finance Minister as brief, lasting about 10 minutes in the evening, a source familiar with the matter stated that Sharma presented his perspective and was advised to engage with the RBI to address the issue.
The RBI had imposed restrictions on PPBL, prohibiting the bank from accepting deposits or top-ups in customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards after February 29, 2024. This action followed persistent non-compliances and material supervisory concerns highlighted in a comprehensive audit report.
As part of his efforts to resolve the issue, Sharma, who serves as the part-time Chairman of the bank, met with RBI officials to seek relaxations on the regulatory actions against PPBL, according to sources.
Paytm Payments Bank has been under RBI scrutiny since 2018, with recent actions prompted by violations of KYC norms and discrepancies in transaction limits, raising concerns over money laundering.
In response to the regulatory scrutiny, Sharma expressed confidence that PPBL would navigate through the challenges, likening the RBI’s action to a significant obstacle that the bank would overcome in the coming days or quarters. He also indicated plans for One97 Communications Ltd (OCL), Paytm’s parent company, to reduce dependency on PPBL by shifting nodal accounts and QR codes to other banks.
Meanwhile, amidst the regulatory turbulence, shares of OCL, which had experienced a 43% decline over the past three sessions, saw a 3% recovery on Tuesday, reaching Rs. 451.60 on the BSE.
Additionally, OCL denied rumours suggesting negotiations with Jio Financial of the RIL group for the acquisition of Paytm Payments Bank’s wallet business. Dismissing the speculations as baseless and factually incorrect, Paytm clarified that neither the company nor Paytm Payments Bank had engaged in any such discussions.
