Reserve Bank of India (RBI) governor Shaktikanta Das on Monday ruled out any "review" of its action against Paytm Payments Bank Ltd (PPBL) as there was “hardly any room” to go back on the curbs.
The RBI governor reiterated the controls were imposed after a comprehensive assessment of the payments bank. The apex bank will come out with a FAQ (frequently asked questions) this week to answer the queries of the bank’s customers and depositors. Das was in Delhi to attend an RBI board meeting.
On January 31, the RBI directed PPBL to stop accepting deposits or top-ups in customer accounts, wallets, FASTTags and other instruments after February 29.
“At the moment let me say very clearly there is no review of this (PPBL) decision. If you are expecting a review of the decision, let me very clearly say there is (going to be) no review of the decision,” Das said.
“Wait for FAQ that will have a set of clarifications related to customers of PPBL as our priority is customers should not be inconvenienced. Customer interest and depositors interest is uppermost for us,” Das said
Rivals benefit
The RBI action has led to Paytm rivals such as Google Pay and PhonePe witnessing a sharp increase in downloads. A study by Kirana Club claimed 42 per cent of Paytm users among local shops have switched to its rivals.
Speaking to analysts after the RBI action, the top management of One97 Communications Ltd (OCL), the Paytm parent, said the Paytm QR code, which is powered by PPBL and has a virtual payment address (VPA), will be changed to any other sponsor bank.
They disclosed that while there are several sponsor banks which are working with the company, the VPA will be moved to another bank.
Axis Bank is one such lender interested in a collaboration. The bank’s managing director & CEO, Amitabh Chaudhry, said in Mumbai on Monday, it is “willing to work’’ with Paytm, but subject to RBI’s approval.
“Subject to regulatory approval and if the regulator allows us to work with Paytm, we will work with them, they are an important player,” he said at an event.
Arjun Chowdhry, group executive of affluent banking, NRI, cards, and payments, Axis Bank, reportedly said while they were in talks with PPBL for ‘business as usual’, they remain in conversations after the RBI’s January 31 order.
Unused Rs 2000cr
Paytm has said it expects an annual operational profit impact of Rs 300-500 crore because of the RBI action.
While the street is worried about the challenges ahead, reports state the company has a corpus which can be utilised for pursuing opportunities in other areas.
A Moneycontrol report said as the company stares at the possibility of losing a big portion of its revenue and profit, an unused corpus of Rs 2,000 crore raised during its initial public offering (IPO) to acquire smaller companies could be utilised. It added that OCL has sounded off investment banks to tap opportunities in e-commerce, payments and online marketing space.
