On Friday, Paytm CEO Vijay Shekhar Sharma addressed user concerns following the Reserve Bank of India’s directive to its banking arm, Paytm Payments Bank, to cease fresh deposits by the end of February.
The RBI’s move came after an audit revealed persistent non-compliances and significant supervisory concerns, prompting additional measures. Existing customers, however, retain the freedom to withdraw funds and use prepaid cards or wallets without restrictions.
In response, Sharma assured users that the Paytm app would continue working normally beyond February 29. Despite this, analysts at Bernstein labeled the RBI directive as a negative development, adding to the regulatory challenges already facing Paytm. They noted that the RBI’s actions effectively mark the end of Paytm Payments Bank operations.
Following the directive, Paytm announced a temporary pause in its lending platform operations while engaging in discussions with banks for potential partnerships. Bhavesh Gupta, COO of Paytm, stated that they are addressing lenders’ concerns and clarifying the impact on the portfolio.
During a conference call with analysts, Sharma acknowledged the significance of the moment, emphasizing their commitment to immediate compliance with RBI directives. The fintech firm estimates an impact of Rs 300-500 crore due to the regulatory measures.