Paytm CEO Vijay Shekhar Sharma reassured users on Friday, addressing concerns after the Reserve Bank of India (RBI) ordered its banking arm to cease accepting new deposits.
Vijay Shekhar Sharma stated in a blog post that Paytm’s app will continue to function normally beyond February 29 for existing users to withdraw funds without constraints.
“Your favourite app is working and will keep working beyond February 29 as usual. I, with every Paytm team member, salute you for your relentless support. For every challenge, there is a solution, and we are sincerely committed to serving our nation in full compliance. India will keep winning global accolades in payment innovation and inclusion in financial services, with PaytmKaro as the biggest champion of it,” said Sharma.
Following the announcement, Paytm also paused its lending platform operations temporarily, engaging in discussions with banks for potential partnerships.
Bhavesh Gupta, COO of Paytm, mentioned ongoing conversations with lenders to address concerns and clarify the impact on the portfolio. In a conference call with analysts, Sharma emphasised the company’s commitment to immediate compliance with the RBI’s directions.
The RBI’s action follows a comprehensive system audit report and compliance validation by external auditors. Starting February 29, 2024, Paytm Payments Bank Limited (PPBL) is prohibited from accepting new deposits, credit transactions, or top-ups in customer accounts, prepaid instruments, wallets, FASTags, and more.
Customers are allowed to withdraw or use balances without restrictions, but other banking services like fund transfers and UPI facilities will be discontinued. The nodal accounts of One97 Communications Ltd and Paytm Payments Services Ltd. must be terminated by February 29, 2024.
Settlement of all pipeline transactions and nodal accounts initiated on or before February 29, 2024, should be completed by March 15, 2024. The RBI had previously directed PPBL to stop onboarding new customers in March 2022.