SUMMARY
In March, Paytm Payments Bank recorded 7.4 Mn fund transfer transactions in its prepaid payment instruments division
For use of the wallet for purchasing goods and services, transactions amounted to just over a quarter at 66 Mn
The crisis for the company started when RBI barred Paytm Payments Bank from any deposits or credit transactions, or top-ups in any of its customer accounts
The regulatory actions against paytm
Payments Bank have impacted its mobile wallet business operation, thus bringing it to a standstill.
In March, Paytm Payments Bank recorded 7.4 Mn fund transfer transactions in its prepaid payment instruments division, marking a substantial 64% decrease from the 20.7 Mn transactions reported in December 2023, as per The Reserve Bank of India’s (RBI) data.
For use of the wallet for purchasing goods and services, transactions amounted to just over a quarter at 66 Mn, as opposed to 247 Mn during the same time frame.
Inc42 has reached out to Paytm on the same. The copy will be updated based on the response.
The fintech major’s crisis started when the RBI barred Paytm Payments Bank from any deposits or credit transactions, or top-ups in any of its customer accounts. The central bank further said Paytm Payments Bank can also not provide any other banking services, such as UPI facility and fund transfers.
Later, the RBI extended the deadline for stopping other banking services, such as UPI facility and fund transfers, to March 15. However, the central bank has stuck to the February 29 deadline for the termination of the nodal accounts of “One97 Communications and Paytm Payments Services” maintained by Paytm Payments Bank.
Following the RBI’s action on Paytm Payments Bank, Paytm founder and CEO Vijay Shekhar Sharma stepped down from the payments bank’s board. The bank also reconstituted its board.
Recently, Sharma also said that Paytm Payments Bank’s board is independent and is capable of addressing regulatory concerns.
Earlier on April 17, the fintech said it commenced the process of customer migration to other partner payment service provider (PSP) banks, including Axis Bank, HDFC Bank, SBI and Yes Bank.
To address regulatory concerns and restore confidence, Paytm has undertaken several measures, including revamping its payment bank’s board. Additionally, it has forged partnerships with PSP banks to sustain its services and relocated the nodal account of Paytm Payments Bank to these institutions.
Furthermore, Paytm recently acquired the 25th TPAP license, positioning itself among competitors like Google Pay, PhonePe, and CRED.
