The Reserve Bank of India (RBI) has imposed restrictions on Paytm Payment Bank. Several services of the bank have been halted since February 29, 2024. Due to banking irregularities and non-compliance with Know Your Customer (KYC) rules, the RBI has taken action against Paytm Payment Bank, ordering a halt on the bank’s services. Subsequently, reports surfaced indicating that Paytm is preparing to sell its wallet business.
Media reports suggest that Reliance Industries’ Jio Financial Services and HDFC Bank are considering acquiring Paytm’s wallet services. It is claimed that Jio Financial Services Limited has been in discussions with Paytm since November of the previous year. However, Jio Financial Services has denied any deal with Paytm, while the parent company of Paytm, One97 Communications, and Jio Financials have clarified their stance on the matter. Additionally, efforts are underway to protect Paytm’s wallet business by HDFC Bank, although no confirmation has been provided by the bank.
Refuting ongoing media speculation, Jio Financial stated that no negotiations are taking place regarding the purchase of Paytm’s wallet. Similarly, Paytm has dismissed any talks of a deal with Jio Financial Services.
Moving forward, HDFC Bank might acquire Paytm’s wallet business, but uncertainties remain. Meanwhile, One97 Communications is attempting to partner its payment bank accounts with other banks. However, several private banks have declined partnerships with Paytm. These banks are awaiting clear directives from the RBI regarding the reasons for the strict measures against Paytm Payment Bank.
In light of financial irregularities, the RBI has taken action against Paytm Payment Bank, effective February 29. Paytm aims to retain its merchants and customers despite changing sponsor banks. However, this process involves complex steps such as transferring existing accounts to new ones and re-verifying KYC. While these steps may seem straightforward, rectifying financial irregularities and compliance issues is crucial. Several questions arise, leading banks to distance themselves from Paytm.