Paytm CEO Urged by Nirmala Sitharaman To Resolve Issues With RBI Amid Regulatory Crisis
Paytm CEO and Founder Vijay Shekhar Sharma met Union Finance Minister Nirmala Sitharaman on Tuesday to discuss the Paytm Payments Bank crisis, according to reports.
In the meeting, which lasted for approximately ten minutes, Mr Sharma was told that the government’s role in this matter was minimal. Ms Sitharaman also advised Mr Sharma to address the regulatory concerns with RBI officials.
The central bank’s recent mandate, issued last Wednesday, directed Paytm to suspend its widely used digital wallet services and FASTags, deposits, and credit transactions after February 29. According to the RBI order, customers will be able to use balances from their accounts without any restrictions.
The announcement was made citing supervisory concerns and non-compliance with rules and regulations. The RBI mandate has had a severe impact on Paytm stock values which has plummeted by over 40 percent since, rebounding on Tuesday.
The Paytm executive also had discussions with RBI officials on Monday to discuss the regulatory concerns. Nodal accounts of Paytm’s parent company, One97 Communications Ltd, and Paytm Payments Bank Ltd have also been terminated by the RBI.
“Over the last two years, we have been working with multiple third-party leading banks. We are expanding these relationships, and they are progressing positively. We continue to operate (and have been in the past) with not just one partner but multiple banking partners for a host of services including Paytm QR. In the instances where our associate Paytm Payments Bank operates as a back-end bank, these services can seamlessly be transitioned to other partner banks. This means that for our merchant partners, there will be no disruptions, no need to revisit existing setups, and no additional effort. They can continue using our pioneering, Made-In-India Paytm QR codes, Soundbox, and card machines as before,” said a Paytm spokesperson.
Amidst the crisis, Paytm Payments Bank has sought to reassure its customers by notifying them that their money is “safe”. However, customers would not be able to deposit money in their accounts or wallets after February 29. Paytm CEO has stated that the app will otherwise, continue to work as usual. Sharma has also assured his employees that there will be no layoffs at the company.
