One97 Communications Ltd (Paytm) on Thursday morning informed stock exchanges that Paytm Payments Bank Limited was taking immediate steps to comply with RBI directions, including working with the regulator to address their concerns as quickly as possible. A host of foreign brokerages including Jefferies, Macquarie and Bernstein see serious implications of the RBI directives. While Jefferies sees a collateral impact on Paytm's lending business, Macquarie said a near-term solution is unlikely.
For all practical purposes, the RBI notification ended the operations of Paytm payment bank Bernstein said adding that it a definite negative development and adds to the heavy regulatory overhang on the business.
Paytm said it has been informed that the RBI move does not impact user deposits in their savings accounts, Wallets, FASTags, and NCMC accounts, where they can continue to use the existing balances.
"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, Paytm said in a filing to BSE.
Going forward, Paytm will be working only with other banks, and not with Paytm Payments Bank Limited, it 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. 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.
Paytm'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, the company said.
"With regard to the direction on termination of nodal account of OCL and Paytm Payments Services Limited (PPSL) by February 29, 2024, OCL and PPSL will move the nodal to other banks during this period. OCL will pursue partnerships with various other banks, to offer various payment products to its customers," it said.
Paytm said its financial services such as loan distribution, insurance distribution and equity broking, are not in any way related to Paytm Payments Bank Limited and are expected to be unaffected by this direction.
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