The company said the RBI action won’t impact user deposits in their savings accounts, wallets, FASTags and NCMC accounts, where they can continue to use the existing balances.
A day after the Reserve Bank of India (RBI) barred Paytm Payments Bank Ltd (PPBL) from accepting deposits or top-ups, the bank said it is “taking immediate steps to comply with RBI directions”, including working with the regulator to address their concerns as quickly as possible.
Shares of One 97 Communications Ltd (OCL), the parent company of PPBL, plunged 20 per cent to Rs 608.80 on the stock exchanges on Thursday following the tough RBI action.
Depending on the nature of the resolution, the company said, it expects this action to have a worst-case impact of Rs 300 to 500 crore on its annual EBITDA (earnings before interest, tax, depreciation and amortisation) going forward. Moreover, OCL will be working only with other banks, and not with Paytm Payments Bank, it said in an exchange filing.
The company said the RBI action won’t impact user deposits in their savings accounts, wallets, FASTags and NCMC accounts, where they can continue to use the existing balances.
Depending on the nature of the resolution, the company said, it expects this action to have a worst-case impact of Rs 300 to 500 crore on its annual EBITDA (earnings before interest, tax, depreciation and amortisation) going forward. Moreover, OCL will be working only with other banks, and not with Paytm Payments Bank, it said in an exchange filing.
The company said the RBI action won’t impact user deposits in their savings accounts, wallets, FASTags and NCMC accounts, where they can continue to use the existing balances.
In a big blow to PPBL’s operations, the RBI on Wednesday barred Paytm Payments Bank from accepting deposits or top-ups in any of its key products—customer accounts, prepaid instruments, wallets, FASTags and National Common Mobility Card (NCMC), among others—after February 29 in the wake of “persistent non-compliances and material supervisory concerns”.
“OCL, as a payments company, works with various banks (not just Paytm Payments Bank), on various payments products. OCL started to work with other banks since starting of the embargo. We now will accelerate the plans and completely move to other bank partners,” the statement said.
“The next phase of OCL’s journey is to continue to expand its payments and financial services business, only in partnerships with other banks,” Paytm said.
“We offer acquiring services to merchants in partnership with several leading banks in the country and will continue to expand third-party bank partnerships. The Paytm Payment Gateway business (online merchants) will continue to offer payment solutions to its existing merchants,” it said.
“OCL’s offline merchant payment network offerings like Paytm QR, Paytm Soundbox, Paytm Card Machine, will continue as usual, where it can onboard new offline merchants as well,” Paytm said.
No further deposits or credit transactions or top-ups should be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime, the RBI had said on Wednesday.
“With regard to the direction on termination of nodal account of OCL and Paytm Payments Services Ltd (PPSL) by February 29, 2024, OCL and PPSL will move the nodal to other banks during this period,” Paytm said.
OCL will pursue partnerships with various other banks, to offer various payment products to its customers. OCL’s other financial services such as loan distribution, insurance distribution and equity broking, are not in any way related to Paytm Payments Bank and are expected to be unaffected by this direction.
“Paytm Payments Bank is run independently by its management and board. While OCL is allowed to have two board seats on the board of PPBL, as a part of its shareholder agreement, OCL exerts no influence on the operations of PPBL, other than as a minority board member, and minority shareholder,” the Paytm statement said.
Paytm said its founder – Vijay Shekhar Sharma — has reconfirmed to us that he has not taken any margin loans, or otherwise pledged any shares that are directly or indirectly owned by him, Paytm statement said.
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