
The Reserve Bank of India (RBI) has directed Paytm Payments Bank (PPBL) to halt almost all its services after February 29. This move is expected to affect the company’s annual operational profit by ₹300-500 crore.
RBI’s Restrictions
On Wednesday, the central bank prohibited Paytm from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, FASTags, and more after the specified date. The action followed a comprehensive audit and compliance validation report by external auditors.
Company’s Response
In a regulatory filing, Paytm stated that the potential impact on its annual EBITDA could range from ₹300-500 crore. However, the company remains optimistic about improving its profitability despite the setback.
Ownership Structure
One97 Communications Ltd (OCL), the owner of the Paytm brand, holds a 49% stake in PPBL. Despite the ownership, PPBL is classified as an associate and not a subsidiary.
Transition to Other Banks
In response to the RBI’s action, Paytm announced plans to accelerate its collaboration with other banks. OCL will now exclusively work with other banks, distancing itself from PPBL.
Compliance Measures
PPBL is taking immediate steps to comply with the RBI’s directives. The company is working closely with the regulator to address concerns promptly. The filing assured that user deposits in savings accounts, wallets, FASTags, and NCMC accounts will remain unaffected.
Continuation of Services
While PPBL faces restrictions, Paytm’s Payment Gateway business for online merchants will continue operating. Additionally, offline merchant payment network offerings like paytm QR, paytm Soundbox, and paytm Card Machine will continue as usual.
Termination of Nodal Accounts
RBI directed the termination of ‘nodal accounts’ of OCL and Paytm Payments Services (PPSL) by February 29. OCL and PPSL are mandated to move their nodal accounts to other banks during this period.
Future Plans
Paytm expressed its commitment to pursue partnerships with various banks to offer diverse payment products to its customers. The company clarified that its financial services, such as loan distribution, insurance distribution, and equity broking, are unrelated to PPBL and are expected to remain unaffected by the regulatory action.
I and my wife use separate ac on payM wallet for local domestic grocery purchase, medicines around Rs 10,000/+-, per month, and we have some balance,less than Rs 10,000/-
will it affect our balance as on date 29 Feb 24,or it is safe to continue further
hellobanker in ,
date 02 Feb 2024
Can we use this plateform to quote, pvt bank problem of FY 2020-21, forget H form,TDS from FD, IT 26AS zero-PART REFUND,direct- in sb ac FOR BALANCE TDS REFUND,,no satisfactory reply for the years, and diff PNO ,external CA, send diff replies,
how can we trust bank,s WORD CLASS customer friendly innovative digital system, it just seems to be an harrasement to SR CITIZEN & now ELDER 80+