Paytm CEO Vijay Shekhar Sharma meets RBI to address concerns

Mumbai: Paytm's chief executive officer Vijay Shekhar Sharma met RBI officials to discuss regulatory concerns and to understand if the company could transfer its wallet business and electronic toll collection system FASTag. The fintech giant is also said to have sought an extension of RBI's deadline that ends on February 29.

These talks come after the RBI last Wednesday barred Paytm Payments Bank from taking further deposits or making credit transactions or top-ups in customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Card cards from March 1 citing supervisory concerns and non-compliance with rules.

“The RBI heard Paytm out without making any commitments,” Reuters said. The meeting took place on Monday.

According to the company website, Paytm Payments has more than 30 crore wallets and three crore bank accounts. It claims to have issued over 80 lakh FASTag units to date. The platform has processed over 5.791 crore FASTags transactions in terms of volume in December 2023, data from National Payments Corporation of India shows.

Earlier, One97 Communications denied reports that Jio Financial Services was in talks with it to acquire Paytm Payments Bank’s wallet business. In an exchange filing Monday, Jio Financial Services too denied talks with Paytm.

On Monday, media reports claimed that Jio Financial Services and HDFC Bank were frontrunners to buy Paytm's wallet business.

Shares of One97 Communications, the company’s parent, ended with gains after a three-day rout. Its stock ended at Rs 452.8, up 3.3 per cent over its previous day’s close. Shares worth Rs 2,775 crore were traded on the NSE.

Paytm founder Vijay Shekhar Sharma has reportedly assured employees that there would be no layoffs in the company and that they are engaging with RBI and working with other banks for partnership. “You are a part of the Paytm family, and there is nothing to worry about,” he said in the town hall on Saturday.

A group of startup founders, meanwhile, have written to RBI governor Shaktikanta Das and finance minister Nirmala Sitharaman asking them to reconsider the regulatory action against Paytm’s payments bank unit.

The letter signed by Policybazaar’s Yashish Dahiya, MakeMyTrip’s Rajesh Magow, Bharat Matrimony’s Murugavel Janakiraman, and Innov8’s Ritesh Malik said that the action against Paytm would have far-reaching impact on the ecosystem and not just on Paytm.

They urged RBI to reassess the “proportionality of restrictions” on Paytm considering the potential impact on the payments bank, the fintech ecosystem and the broader economy. According to the report, the founders also requested for a “clear and practical window” for Paytm to address the deficiencies and demonstrate its compliance.