The Reserve Bank of India (RBI) is contemplating the cancellation of the licence of Paytm Payments Bank, which is grappling with a financial crisis, sources within the RBI have disclosed to Moneycontrol. The deadline for the closure of business operations and settlement of transactions, set for March 15, appears to be the pivotal point prompting this decision, according to the report.
Speaking on the condition of anonymity, one of the sources told Moneycontrol, "That's the intention as of now," indicating the growing apprehension surrounding the fate of Paytm's payment bank.
The RBI had instructed the payments bank to settle all outstanding transactions and nodal accounts by March 15, stipulating that no further transactions would be permitted beyond this date. The decision to potentially revoke the license stems from the recurrent non-compliance issues, which led the RBI to impose significant business restrictions on the Payments Bank, effectively halting its operations by February 29.
A final verdict on the licence cancellation is expected to be made in the forthcoming days, as per the sources.
ABP Live couldn't independently verify these reports.
Recent developments indicate attempts by Paytm's management to address the crisis. Vijay Shekhar Sharma, promoter and CEO of Paytm, reportedly met Finance Minister Nirmala Sitharaman on February 6. Additionally, top executives from Paytm engaged in discussions with senior officials at the RBI.
The RBI had previously imposed severe business restrictions on Paytm Payments Bank, prohibiting the acceptance of fresh deposits and credit transactions after February 29. This decision followed a Comprehensive System Audit report, along with subsequent compliance validation reports, which highlighted persistent non-compliances and material supervisory concerns within the bank, necessitating further regulatory action.
Effective February 29, no additional deposits, credit transactions, or top-ups will be allowed in customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. However, withdrawals or utilisation of balances by customers from their accounts, including savings bank accounts and current accounts, will remain unrestricted until the available balance is depleted.
In a move dating back to March 11, 2023, the RBI had prohibited Paytm Payments Bank from onboarding new customers.
The stock of One97 Communications, the parent company of Paytm, closed at Rs 463 on the NSE on February 6, marking a 2.63 per cent rise after witnessing a decline of over 40 per cent in the preceding three sessions.