ACTION PUNJAB NEWS Desk: Paytm, led by founder Vijay Shekhar Sharma, encountered a significant setback as the Reserve Bank of India (RBI) declined to offer any concessions during their recent meeting.
According to reports from Moneycontrol, the central bank refused to provide assistance to Paytm Payments Bank, including facilitating the migration of accounts to other banks or extending the deadline beyond February 29.
Vijay Shekhar Sharma was reportedly advised to engage directly with banks and the National Payments Corporation of India (NPCI), which manages the Unified Payments Interface (UPI). However, the RBI indicated that it would not intervene to compel lenders to undertake these actions, as per the report. Paytm, with over three crore merchants on its platform, relies on its Payments Bank for settlement accounts, with approximately 60 lakh merchants utilising this service.
Banks hesitant to onboard Paytm payments bank customers
According to Moneycontrol, banks actively collaborating with fintech companies are showing reluctance to onboard customers from Paytm Payments Bank without approval from the central bank.
With over three crore merchants on its platform, Paytm has approximately 60 lakh using the Payments Bank for settlements. Following the RBI’s directive to cease all deposits after February 29, the company faces the task of migrating these accounts to third-party banks to ensure uninterrupted payment operations.
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In response to the regulatory challenges, Paytm founder Vijay Shekhar Sharma met with Finance Minister Nirmala Sitharaman on Tuesday to address the crisis affecting his company. Meanwhile, the Enforcement Directorate (ED) and Financial Intelligence Unit, responsible for enforcing the Prevention of Money Laundering Act (PMLA), are investigating potential violations related to Paytm’s payment gateway under anti-money laundering provisions.
A senior official informed PTI that the ED has requested the RBI to provide its latest report to assess the need for initiating a probe against Paytm Payments Bank. However, Paytm issued a statement affirming that neither the company nor its founder, Vijay Shekhar Sharma, are under investigation by the ED for money laundering allegations.
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(Inputs from agencies)