Paytm faces Rs 500 crore impact as RBI imposes restrictions on payments bank

PTC News Desk: In response to RBI's directive preventing Paytm Payments Bank from accepting new deposits, Paytm anticipates an adverse impact on annual earnings in the range of ₹300 to ₹500 crore. The company plans to shift its operations entirely to other bank partners, excluding Paytm Payments Bank, to continue its expansion in payments and financial services. Paytm assures it is promptly taking measures to comply with RBI directives and is collaborating with the regulator to address concerns efficiently.

Paytm's response to RBI directive: Shift to other bank partners

In response to the RBI directive, Paytm's parent company, One97 Communications Ltd. (OCL), has announced its decision to fully transition to other bank partners, excluding Paytm Payments Bank Limited (PPBL).

"We will expedite our plans and exclusively collaborate with other banks. Moving forward, OCL will work solely with alternative bank partners, excluding Paytm Payments Bank Limited. The next phase of OCL's journey involves expanding its payments and financial services business through strategic partnerships with other banks," stated the fintech giant in a Thursday announcement.

Impact of RBI order on Paytm services

Paytm clarified that its Payment Gateway business, serving online merchants, will remain unaffected and continue providing payment solutions to its existing clients. The order does not impact user deposits in savings accounts, Wallets, FASTags, and NCMC accounts, allowing users to utilize existing balances seamlessly.

Furthermore, One97 Communications Ltd.'s (OCL) offline merchant payment network services, including Paytm QR, Paytm Soundbox, and Paytm Card Machine, will continue operating without disruption. This encompasses the ability to onboard new offline merchants as part of regular operations.

The statement assured that OCL's other financial services, such as loan distribution, insurance distribution, and equity broking, are unrelated to Paytm Payments Bank Limited and are expected to remain unaffected by the regulatory direction.

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Independence of Paytm payments bank: A clarification

Paytm clarified that its founder, Vijay Shekhar Sharma, has not been involved in margin loans or pledged any shares, either directly or indirectly owned by him. The company emphasized that Paytm Payments Bank Limited operates autonomously under its management and board.

Despite One97 Communications Ltd. (OCL) holding two board seats on the bank as per the shareholder agreement, it retains a minority position. Paytm stressed that OCL exerts no substantial influence on the bank's operations beyond its role as a minority board member and shareholder.

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(Inputs from agencies)