Days after RBI's bombshell, fintech major Paytm said on Wednesday it will reduce loan disbursals below Rs 50,000.
This development comes days after the Reserve Bank of India (RBI) increased the risk weights, or the capital that banks need to set aside for every loan disbursed, for banks and NBFCs by 25 percentage points to 125% on retail loans.
Paytm said it is expanding its credit distribution business to enhance focus on higher ticket loans for consumers and merchants in partnership with banks and NBFCs.
Paytm has temporarily halted its Buy Now, Pay Later service as lending partners have become cautious about fintech partnerships after RBI raised risk weightages by 25% against unsecured lending, reported Economic Times earlier on Wednesday.
On Wednesday, scrip of One 97 Communications Ltd, the parent firm of Paytm, on BSE closed trading 3.2% lower at Rs 812.25.
"On the back of recent macro development and regulatory guidance, in consultation with lending partners, in line with its continued focus on driving a healthy portfolio, the company has recalibrated the portfolio origination of less than ₹50,000, which is prominently the postpaid loan product and will now be a smaller part of its loan distribution business going forward," said Paytm in a statement while alluding to RBI's recent directive.
Merchant loans, which are given to MSME as business loans, will continue to be a focus for Paytm. As these loans are given for business purposes to small merchants, they don’t get impacted by the recent regulatory guidance.
A Paytm spokesperson said: "As the lending distribution business is maturing, we see newer opportunities of expansion to offer high-value personal and merchant loans. We will continue to focus on originating the high portfolio quality for our lending partners, along with strict adherence to risk and compliance. We have seen great scale and acceptance for our loan distribution business, so we believe this expansion will further aid us to grow the business.”
Meanwhile, on X there are numerous posts about people not being able to make postpaid payments.
"Even after scanning the QR code the postpaid option is not activating to pay," said one X user.
For such posts, Paytm's customer care has been giving the same reply, "Hi, please let us have this checked on priority. To ensure your information remains confidential, we request you to DM us your registered mobile number, so that we can assist you urgently. Looking forward to hearing back from you."
"My Paytm postpaid account is not working despite having available balance," said another X user.
"Mine is showing active, valid until 2024 September with complete limit available but still I’m unable to use anywhere. Paytm is also not providing any proper reply," said another harried Paytm user on X.