Paytm CEO Vijay Shekhar Sharma held discussions with Finance Minister Nirmala Sitharaman, according to sources quoted by ANI.
The meeting followed the Reserve Bank of India's (RBI) stringent directive issued on January 31, which mandated an immediate halt to the onboarding of new customers by Paytm Payments Bank and called for a cessation of its key banking services post-February 29.
The RBI's decision was prompted by "persistent non-compliances and continued material supervisory concerns" identified within the bank. Consequently, Paytm Payments Bank was directed to cease additional deposits, withdrawals, and top-ups across various customer-related financial instruments, including wallets, accounts, prepaid devices, and National Common Mobility Cards (NCMC).
The regulatory action had a profound impact on Paytm, with shares of its parent company, One97 Communications Ltd, experiencing a sharp decline. Over two days, from January 31 to February 2, 2024, the company's market capitalization decreased by Rs 17,378.41 crore, reflecting a 36 percent drop in share value.
In response to the RBI's directives, Paytm requested an extension of the February 29 deadline and sought clarity regarding the transfer of licences for wallet business and FASTag operations. However, no resolution or remedial measures were decided upon during the meeting between Sharma and RBI officials.
The crisis prompted a group of founders to appeal to RBI Governor Shaktikanta Das and Finance Minister Sitharaman, urging a review of the regulatory actions imposed on Paytm Payments Bank. They stressed the importance of reassessing the proportionality of the restrictions, considering their potential impact on the payments bank, the fintech ecosystem, and the broader economy. They also advocated for an opportunity for Paytm to address deficiencies and demonstrate compliance.
Despite the challenges, Paytm clarified that neither the company nor Vijay Shekhar Sharma are under investigation for any Enforcement Directorate probe or Foreign Exchange Management Act (FEMA) violations. Additionally, rumours of negotiations with Mukesh Ambani for Jio Financial Services to acquire Paytm wallets were dismissed.
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