RBI's action on Paytm payments bank: Here's what Paytm wants users to know
Synopsis
The RBI had imposed restrictions on Paytm Payments Bank, including a ban on transactions starting February 29. In a BSE filing, OCL stated that it will expand its financial services business by working exclusively with other banks, excluding Paytm Payments Bank Limited.
In response to the Reserve Bank of India's (RBI) sanctions on Paytm Payments Bank, One 97 Communications Limited (OCL), the parent company of Paytm, has announced its decision to sever ties with Paytm Payments Bank Limited, moving toward collaborations with other banking partners.
The RBI had imposed restrictions on Paytm Payments Bank, including a ban on transactions starting February 29. In a BSE filing, OCL stated that it will expand its financial services business by working exclusively with other banks, excluding Paytm Payments Bank Limited.
The company emphasized that user deposits in savings accounts, wallets, FASTags, and NCMC accounts remain unaffected by the ban, and users can continue utilizing these services with their existing balances. Offline merchant payment services like Paytm QR, Paytm Soundbox, and Paytm Card Machine will continue operations, allowing the onboarding of new offline merchants.
OCL's other financial services, such as loan distribution, insurance distribution, and equity broking, are not directly linked to Paytm Payments Bank Limited and are expected to remain unaffected.
Paytm Payments Services Limited (PPSL) will transition the nodal to other banks between January 31 and February 29 for affected services. The founder of the company has not pledged any shares or taken margin loans directly or indirectly associated with him.
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OCL clarified that Paytm Payments Bank Limited operates independently with its own management and board, and while OCL holds two board seats, it exerts no influence on the bank's operations beyond being a minority board member and shareholder. The company anticipates a worst-case impact of Rs 300 to 500 crores on its annual EBITDA due to these actions.
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