Amid RBI’s curb on Paytm Payments Bank Ltd (PPBL), Founder & CEO Vijay Shekhar Sharma on Tuesday met Finance Minister Nirmala Sitharaman along with a few Paytm officials to discuss regulatory concerns.
“Discussions are on about addressing the regulatory concerns and compliance issues with both the RBI and the ministry,” one of the sources told Reuters
The meeting was sought after the RBI’s major restrictions on PPBL, Paytm’s drastic dip in stock value, the Enforcement Directorate’s concern over Paytm’s use in money laundering activities, and the advisory issued by the Confederation of All India Traders (CAIT) to urge brick-and-mortar businesses to shift to alternative payment applications.
According to the reports, Sharma earlier on Monday met RBI officials to discuss regulatory concerns.
Speaking with Reuters, 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 license being canceled, a source familiar with the matter said to Reuters last week.
According to ET NOW, Brokerage firm Bernstein gave Paytm’s stock(One97 Communications Ltd) a ‘buy’ rating. The brokerage maintained that the stock was set to outperform with a target price of Rs 600 per share.
Besides this, Avinash Gorakshakar, head of research at Profitmart Securities, said the share move could be a “dead-cat bounce” after the recent rout, pointing to the amount of negative news still overhanging the stock.
Addressing to concerns over Paytm’s services and user experience, a Paytm spokesperson said,
“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.” to TOI
“We are actively engaging with our vast network of merchant partners and it’s heartening to see their unwavering support and faith in us. They understand that Paytm QR, Soundbox, and card machines will continue to function as usual. We are onboarding more merchants and also observing a consistent pattern in customer behaviour, with no shift in their preference for using Paytm for payments. Paytm is committed to compliance with all regulatory directives while continuing to offer innovative, secure, and seamless digital payment solutions to millions across India. We remain focused on our mission to empower businesses and consumers alike, reinforcing our role as a leader in India’s digital payments landscape.” the spokesperson added