Paytm CEO Vijay Shekhar Sharma has put out a statement reassuring users that the digital payments and services app will continue to operate without disruption beyond February 29, despite the Reserve Bank of India (RBI) imposing restrictions on Paytm Payments Bank Limited (PPBL).
The RBI has prohibited PPBL from accepting deposits or top-ups in customer accounts, prepaid instruments, wallets, and FASTags, among other services, after February 29, 2024.
In a social media post, Sharma, the founder and CEO of One97 Communications Limited (OCL), Paytm’s parent companyfavorite app, is working, and, with every Paytm team member, There is a solution for every challenge. We are sincerely committed to serving, and we are sincerely committed to serving, emphasized the company’s commitment to serving the nation in full compliance.
He acknowledged the support of Paytm users and stated, “For every challenge, there is a solution, and we are sincerely committed to serving our nation in full compliance.”
While OCL holds a 49 percent stake in PPBL, it classifies it as an associate rather than a subsidiary. Sharma expressed gratitude for the support received from Paytm users and assured them that the app will continue working seamlessly.
During an earnings call on February 1, Paytm’s top management discussed working on a migration plan for PPBL, wallet, FASTag, and other users with alternative banks.
The RBI’s directive is anticipated to impact Paytm’s annual operational profit by Rs 300-500 crore, as customers cannot add money to their wallets and other services.
Paytm clarified that the RBI’s direction to its associate bank does not affect its offline merchants network, device business, and other financial services such as loan distribution, insurance distribution, and equity broking.
The company also stated that the Paytm Payment Gateway business will continue offering payment solutions to existing merchants.
The RBI’s order does not impact user deposits in savings accounts, wallets, FASTags, and National Common Mobility Card (NCMC) accounts, allowing users to continue using their existing balances.
PPBL has been instructed to settle all pipeline transactions and nodal accounts by March 15, 2024, with no further transactions permitted after that.
Sharma described the RBI order as a “big speed bump” during the call, expressing confidence that, with the partnership of other banks and existing capabilities, Paytm will overcome the challenges in the coming days or quarters.
