In a recent development,
Paytm Payments Bank Limited
(PPBL), an associate of One 97 Communications Limited (
OCL
), has been directed by the
Reserve Bank of India
(RBI) to take immediate steps in response to the regulator's concerns. According to PPBL, the
RBI
's directions under section 35A of the
Banking Regulation Act
, 1949, are being promptly addressed to ensure compliance.
PPBL assures users about services to remain active
PPBL, in collaboration with OCL, is actively working to navigate through the challenges posed by the recent RBI directives. Despite these developments, PPBL assures its users that the directions do not impact existing deposits in savings accounts, Wallets, FASTags, and NCMC accounts. Users can continue utilising their account balances without any restrictions.
PPBL to offer its services with other banks
To address the situation, PPBL is expanding its partnerships with leading third-party banks to distribute payments and financial services products. This strategic move aligns with the company's goal to ensure uninterrupted services for its users.
In response to the RBI's directive to terminate the nodal account of OCL and
Paytm Payments Services Limited
(PPSL) by February 29, 2024, PPBL, along with
PPSL
, plans to transition the nodal account to other banks during this period. The company is actively pursuing collaborations with various banks to offer a diverse range of payment products to its customers.
Notably, this development prompts
Paytm
to shift its focus from its associate bank to partnering exclusively with other banks. The company reiterates its commitment to expanding payments and financial services business solely through collaborations with other banks, leaving behind its association with PPBL.
While concerns about the impact of these developments on the company's annual EBITDA are acknowledged, Paytm remains optimistic about its trajectory to improve profitability. The company's founder has clarified that he has not taken any margin loans or pledged shares directly or indirectly owned by him.
As the situation unfolds, Paytm is determined to navigate through the challenges, assuring its users of continued services and adherence to banking regulations.
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