Will Paytm stop working from now on? What will happen to people’s money now? What impact will the Reserve Bank’s decision have on the future of the company? These are some of the questions that are on everyone’s mind today. When the decision of the country’s largest bank came on the banking services of Paytm, it seemed as if there was chaos everywhere. Now, an official statement has come on this from Paytm’s parent company One97 Communications.
In response to the apprehensions, Paytm’s CEO, Vijay Shekhar Sharma, reassures the public that the app will continue to function seamlessly beyond February 29. In a statement on February 2, Sharma, the founder and CEO of Paytm’s parent company One97 Communications Limited (OCL), emphasizes the commitment to serving the nation in full compliance.
Addressing Paytm users directly, Sharma states, “To every Paytmer, your favorite app is working, will keep working beyond 29 February as usual.” Despite the challenges posed by the RBI’s restrictions, Paytm remains steadfast in its dedication to innovation and financial inclusion.
The RBI’s order restricts PPBL from accepting deposits or top-ups in various financial instruments after February 29, 2024. Although OCL holds a 49% stake in PPBL, categorizing it as an associate rather than a subsidiary, Sharma expresses gratitude for the unwavering support and pledges to overcome challenges.
During an earning call on February 1, Paytm’s top management revealed ongoing efforts to devise a migration plan for PPBL, wallets, FASTags, and other users with alternative banks. The company anticipates an impact of ₹300-500 crore on its annual operational profit due to the inability of customers to add money to their wallets and FASTags.
While the RBI’s directive affects PPBL, Paytm assures users that its offline merchants network and device business, including offerings like Paytm Soundbox, EDC, and QR codes, remain unaffected. The fintech company remains committed to onboarding new merchants to its platform.
Emphasizing the resilience of its Payment Gateway business for online merchants, Paytm assures existing merchants that services will continue uninterrupted. Other financial services, such as loan distribution, insurance distribution, and equity broking, are deemed unrelated to Paytm’s associate bank and are expected to be unaffected.
Crucially, Paytm clarifies that the RBI order does not impact user deposits in savings accounts, wallets, FASTags, and NCMC (National Common Mobility Card) accounts. Users can continue to use existing balances without disruption.
The RBI instructs PPBL to settle all pipeline transactions and nodal accounts initiated on or before February 29, 2024, by March 15, 2024, with no further transactions permitted thereafter. Sharma acknowledges the RBI order as a “big speed bump” and expresses confidence in overcoming the challenges through partnerships with other banks and existing capabilities.
On behalf of Paytm, Sharma conveys a positive outlook, believing that the company will navigate through this turbulent period in the next few days or quarters. As Paytm grapples with these regulatory hurdles, the company remains resolute in its mission to serve the nation and uphold its position as a pioneer in payment innovation and financial services.
