“Digital payments and services app Paytm is working and will continue to work as usual even after February 29,” its CEO Vijay Shekhar Sharma said on February 2.
The founder and CEO of One97 Communications Limited (OCL), which owns Paytm brand, on social media platform X said the company is committed to serving the nation in full compliance.
“To every Paytmer, your favourite app is working, will keep working beyond 29 February as usual,” Mr. Sharma said.
Reserve Bank of India (RBI) has barred Paytm Payments Bank Limited (PPBL) from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, and FASTags, among others after February 29, 2024.
OCL holds a 49% stake in PPBL but classifies it as an associate of the company and not as a subsidiary. “I with every Paytm team member salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance. India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it,” Mr. Sharma said.
The Paytm top management during an earning call on February 1 said they are working on a migration plan for PPBL, wallet, FASTag etc users with other banks. The company sees the RBI order to have an impact of ₹300-500 crore on its annual operational profit as its customers will not be able to add money to their wallets, FASTag etc.
Separately, the company informed that its offline merchants network offering and device business such as Paytm Soundbox, EDC, QR are not impacted by the RBI’s direction to its associate bank. The fintech company will also continue onboarding merchants to its platform.
“The Paytm Payment Gateway business (online merchants) will continue to offer payment solutions to its existing merchants. Other financial services such as loan distribution, insurance distribution and equity broking, are also not in any way related to Paytm’s associate bank and are expected to be unaffected by this direction,” the company said.
Paytm said that the RBI order also does not impact user deposits in their savings accounts, wallets, FASTags and NCMC (National Common Mobility Card) accounts, and they can continue to use the existing balances.
RBI has ordered PPBL to settle all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) by March 15, 2024 and no further transactions would be permitted thereafter.
Mr. Sharma during the call had said that RBI order is a “big speed bump” and shared that he could not understand the trigger for the move and he was not aware of the exact nuance that triggered the order.
“On behalf of Paytm I can say it is more of a big speed bump but it is something that we believe that with partnership of other banks and capabilities that we have already developed, we will be able to see through in the next few days or quarters as the case will be,” he had said.