FinTech giant Paytm CEO Vijay Shekhar Sharma on Thursday in a conference call said that the Reserve Bank of India’s order to stop almost all services of Paytm Payments Bank after February 29 is more of a “rush”.
“On behalf of Paytm, this is more speed, but we believe in partnership of the banks and we will be able to do the same in the next few days,” he stated.
He further added that One97 Communications Ltd (OCL) is already working with various other banks and Paytm Payments Bank was one of the key banks. From here the company is clear that it will work with various other banks and not Paytm Payments Bank Ltd (PPBL).
“Many big banks have contacted us offering support and we are overwhelmed. We will have to change our Virtual Payment Address (VPA) as we partner with other banks. The decision to change partner banks will happen in a few weeks,” Sharma. stated
“OCL and PPSL are already in the process of moving node accounts to other banks, and market trading services are not affected due to these directions,” Sharma added.
Sharma said no details have been shared with Paytm separately, but Paytm Payments Bank is already in talks with RBI to resolve issues regarding the bank’s customers.
Speaking at the conference, Bhavesh Gupta, President and COO, Paytm said in offline versions where we see All-in-one QR, powered by Paytm Payments Bank, now that QR will have to be changed to some other sponsored bank. This will be a big exercise, the new acquisition will start in a week or two.
He further added that the company was working with various other partners. Regarding equity and insurance areas, he pointed out that both remain unaffected because they are done independently.
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Shares of Paytm fell 20 percent, at the bottom of a trading band mandated by the exchange, marking its worst day since listing in 2021. The stock fell to a six-week low of 609 rupees, wiping out about USD 1.2 billion worth of the value a company also known as One 97 Communications. Sharma lost USD 233 million as stocks fell.
This comes shortly after the Reserve Bank of India imposed restrictions on Paytm Payments Bank Ltd (PPBL) on January 31, following a system audit report and subsequent compliance validation report by external auditors. In March 2022, the apex bank directed Paytm Payments Bank Ltd (PPBL) to stop onboarding new customers.
ALSO READ: Paytm Payments Bank sees Rs 300-500 cr impact on EBITDA after RBI ban
Paytm Payments Bank issued a clarification on February 01, saying it will take immediate steps to comply with RBI’s directions, including working with the regulator to address their concerns as quickly as possible. It also said it expects Rs 300-500 crore impact on EBITDA after RBI ban.