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Paytm counts its loses, sees ₹500 crore hit from RBI curbs on payments bank
Paytm plans to shift entirely to other bank partners, excluding Paytm Payments Bank, to expand its payments and financial services business.
Paytm said on Thursday that it anticipates a potential adverse impact on its annual earnings in the range of ₹300 to 500 crore due to the Reserve Bank of India's directive preventing its subsidiary, Paytm Payments Bank, from accepting new deposits starting in March.
The company said that it is promptly taking measures to adhere to RBI directives, collaborating with the regulator to swiftly address concerns.
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What will Paytm do now after RBI directive?
Paytm's parent company, One97 Communications Ltd. (OCL), announced plans to shift entirely to other bank partners, excluding Paytm Payments Bank Limited (PPBL).
“We now will accelerate the plans and completely move to other bank partners. Going forward, OCL will be working only with other banks, and not with Paytm Payments Bank Limited. The next phase of OCL's journey is to continue to expand its payments and financial services business, only in partnerships with other banks,” the fintech giant said in a statement on Thursday.
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Which Paytm services are affected by RBI order?
Paytm's Payment Gateway business, catering to online merchants, will continue delivering payment solutions to its existing clientele, the firm said. It added that the order does not impact user deposits in their savings accounts, Wallets, FASTags, and NCMC accounts, where they can continue to use the existing balances.
Additionally, OCL's offline merchant payment network services, encompassing Paytm QR, Paytm Soundbox, and Paytm Card Machine, will continue seamlessly. This includes the capacity to onboard new offline merchants in the usual course of operations, the statement added.
“OCL's other financial services such as loan distribution, insurance distribution and equity broking, are not in any way related to Paytm Payments Bank Limited and are expected to be unaffected by this direction,” it added.
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Does Paytm Payments Bank operate independently?
Paytm said that its founder, Vijay Shekhar Sharma, has not engaged in margin loans or pledged any shares directly or indirectly owned by him. It further clarified that Paytm Payments Bank Limited operates independently under its management and board.
While OCL holds two board seats on the bank as part of its shareholder agreement, it maintains a minority position, exerting no significant influence on the bank's operations beyond being a minority board member and shareholder, Paytm said.
