Paytm CEO Vijay Shekhar Sharma Meets Finance Minister Amid Regulatory Concerns: Report

   2024-02-07 02:02

Vijay Shekhar Sharma, the CEO of Paytm, met Finance Minister Nirmala Sitharaman on February 6, reports suggest citing sources. This comes days after the RBI ordered its payment bank to halt business, leading to a share price rout.

Earlier in the day, news agency Reuters also reported that Sharma and a few Paytm officials had met the RBI on Monday to discuss regulatory concerns.

Also Read: Here’s Why RBI Banned Paytm Payments Bank

The meetings come after the RBI asked Paytm Payments Bank last Wednesday to stop accepting new deposits in its accounts and its popular digital wallets from March, citing supervisory concerns and non-compliance with rules.

“Discussions are on about addressing the regulatory concerns and compliance issues with both the RBI and the ministry,” one of the sources told Reuters.

Paytm Seeks Extension

The company has sought an extension of the Feb. 29 deadline from the RBI and has also been seeking clarity from the central bank regarding the transfer of its licence for the wallets business and digital highway toll payment service Fastag, the source said.

“The RBI heard Paytm out without making any commitments,” a second source said.

Paytm Shares

As of Monday, Paytm’s shares had fallen about 42%, wiping $2.5 billion off its market value on concerns about the impact on the wider business, as Paytm Payments Bank powers most features of the digital payments app, which competes with the likes of Walmart’s PhonePe and Google.

The stock hit a record low early on Tuesday following a Reuters report that India’s federal anti-fraud agency was investigating if platforms run by the company have been involved in violations of foreign exchange rules.

A Paytm spokesperson denied any violations of foreign exchange law, calling the allegations ”unfounded and factually incorrect”.

The RBI’s regulatory clampdown could also be a precursor to Paytm’s licence being cancelled, a source familiar with the matter said last week.

Paytm’s shares reversed some losses on Tuesday to close 2.9% higher at 451.15 rupees, after rising as much as 8% earlier in the day.

Wait and Watch

HDFC Bank is “talking” to its longstanding partner Paytm as the fintech tries to find a way out of the current restrictions placed by RBI, a senior executive at the largest private sector lender said on Tuesday.

Stressing that the bank would have been conversing with the fintech even otherwise given its partnership in the acceptance and aggregator space, HDFC Bank’s country head for payments Parag Rao said it is in a “wait and watch” mode.

Rao made it clear that HDFC Bank’s partnership with Paytm is with the parent entity One97 Communications, and not with the Paytm Payments Bank, which is under regulatory scrutiny.

(With Reuters inputs)

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