HDFC Bank is "talking" to
Paytm
as the fintech company tries to find a way out of the current restrictions placed by RBI, HDFC Bank's country head for payments Parag Rao told news agency PTI. The country's largest private sector lender calls Paytm its long standing partner.
Stressing that the bank would have been conversing with fintech even otherwise given its partnership in the acceptance and aggregator space, Rao said that it is in a "wait and watch" mode. Rao was replying to a question on reports about Paytm reaching out to large banks for support.
"Paytm has been a partner over the years for our acceptance business, for our aggregator business. Under the current circumstances, we don't know too much about what is happening but we are talking, we are waiting and watching to see how events develop. That is all I can say right now," Rao said.
At an event to launch a new credit card proposition for small businesses here, he added that ever since RBI placed restrictions on Paytm, there has been a "significant increase" in the traction witnessed by HDFC Bank for its payments app and also merchant business.
Every "upheaval" in the market which impacts a rival opens up opportunities for other participants as the smart customers realign themselves, Rao said, adding that there is traction for Fastag, prepaid card offerings and sound boxes as well.
Rao made it clear that HDFC Bank's partnership with Paytm is with the parent entity One97 Communications, and not with the Paytm Payments Bank, which is under regulatory scrutiny.
The restrictions placed on Paytm take effect from February 29, and HDFC Bank will watch as the events unfold over the next two weeks, Rao said.
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