The spotlight has turned to the wallet business of Paytm Payments Bank Ltd (PPBL) after the Reserve Bank of India (RBI) prohibited it from taking fresh deposits or undertaking credit transactions and top-ups after February 29.

Though banks are keen on its customer base which comprises 35 crore e-wallets, they are reportedly not in a rush to acquire them.

The banks are awaiting clarity from the RBI on the reasons behind the clampdown and other procedural aspects after the transfer of the business which include conducting fresh KYC (know your customer) exercises of the accounts.

The banking regulator had observed non-compliance about KYC requirements, while transaction limits were above the levels prescribed for minimum-KYC customers — all of which have raised concerns of money laundering, a charge denied by Paytm.

There are also reports of a single PAN used to open multiple accounts.

In a concall with analysts last week, the top management of Paytm said the Paytm QR code, which is powered by PPBL and has a virtual payment address, will have to be changed to any other sponsor bank.

They had indicated VPA could be moved to another bank, with several sponsor banks working with the company. In doing so, Paytm is hoping the merchants will stay with it even as at the backend there is a new sponsor bank.

A Moneycontol report quoting a banker said any entity acquiring the portfolio will have to understand the depth of remediation involved even as there are concerns about KYC issues of merchants, as well.

Shares of One97 Communications Ltd, which owns the Paytm brand, on Monday fell another 10 per cent as investors continued to be on the edge. The counter collapsed by 10 per cent to Rs 438.35 — its lowest trading permissible limit for the day — on the BSE.

The stock has crashed over 42 per cent with more than Rs 20,400 crore of its market valuation wiped out in three days.

However, shares of Jio Financial Services (JFSL) zoomed nearly 14 per cent on reports it could acquire the wallet business of PPBL.

Shares of JFSL, which has been looking to make its mark in the payments space, settled at Rs 289.05, a gain of Rs 35.30 on the BSE.

Apart from JFSL, HDFC Bank is reportedly eyeing the business. There were no official comments from either of these entities.

Meanwhile, a Reuters report said the ED is looking at whether platforms run by One 97 Communications were involved in any violations of foreign exchange rules under Fema.

Company officials said the charges had no basis.

Paytm maintained no overseas remittances of any nature can be done from the payments bank account since the license restricts it from carrying out such transactions.