Paytm crisis: CEO Vijay Shekhar Sharma, officials met RBI to discuss regulatory action

Paytm crisis: Vijay Shekhar Sharma, CEO of fintech company Paytm, whose payments unit was asked to stop onboarding new customers immediately and shut its key banking services after February 29, reportedly met Reserve Bank of India (RBI) officials on Monday. 

According to a report by news agency Reuters that quoted two sources, Vijay Shekhar Sharma and other officials of Paytm met RBI on Monday to discuss a roadmap to address the regulatory concerns flagged by the central bank. 

Paytm reportedly asked for an extension of February 29 deadline. No resolution or forward movement was decided in the meeting between Vijay Shekhar Sharma and RBI. The regulator reportedly did not spell out any remedial measure in the meeting.

The company also sought clarity from RBI regarding transfer of licence for the wallets business and FASTag, the report added.

This comes after reports that a group of founders wrote to RBI Governor Shaktikanta Das and finance minister Nirmala Sitharaman, urging them to reconsider and review the regulatory action against Paytm Payments Bank. They had asked the RBI to reassess the “proportionality of restrictions” on Paytm considering the potential impact on the payments bank, the fintech ecosystem and the broader economy. They also urged for a window for Paytm to address the deficiencies and demonstrate its compliance. 

RBI ordered regulatory actions against Paytm Payments Bank over non-compliances and supervisory concerns. It asked the payments bank to stop deposits, transactions, prepaid instruments, and top-ups in customer accounts, wallets, FASTags, prepaid instruments, NCMC cards. Paytm users were allowed to withdraw or utilise the balance in their accounts with no restrictions. 

Meanwhile, Paytm also issued many clarifications, and stating that there has been no ED probe on the company or Vijay Shekhar Sharma, and that they are not being probed for FEMA violations either. It also clarified that there has been no negotiations with Mukesh Ambani for Jio Financial Services to acquire Paytm wallet, as was reported in certain new sites. 

After the clarification, Paytm shares rose for the first time in five sessions. Paytm shares rose 7.19 per cent to hit a high of Rs 438.35 on BSE. The stock was up 18.81 per cent over its day's low of Rs 395.50.

Also read: Paytm crisis: Startup founders write to RBI Gov, FM Sitharaman to ‘reconsider’ action against Paytm Payments Bank

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