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Paytm CEO Meets Finance Minister and RBI Amid Regulatory Concerns

Wednesday, February 7, 2024 • Tamil Comments
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PayTM's CEO, Vijay Shekar Sharma, engaged in separate meetings with the Indian Union's influential figures on Tuesday, including the nation's Minister of Finance, Nirmala Sitharaman, and administration officials from the influential Reserve Bank of India (RBI). The meetings focused on addressing multifaceted challenges posed by the new rules set forth by RBI that may affect the operations of PayTM Payments Bank.

The meeting occurred in the backdrop of RBI's recent imposition of regulations due to supervisory concerns and alleged non-compliance with regulations. These regulations have led to the compulsory cessation of PayTM Payments Bank's ability to accept new depositors and credit-related services from 29th February onwards.

Sharma's meeting with Sitharaman followed a constructive meeting with RBI officials, during which PayTM presented a plan viable and extensive to address the irregularities highlighted in RBI's official assessment report on its adherence to regulations. The restriction of operations posed significant concerns about the viability of PayTM Payments Bank. This concern spurred a considerable fall in the stock prices of its parent company, One97 Communication Limited.

In response to the concerns, Sharma and PayTM provided reassurance to customers that the funds deposited in their accounts, wallets, FASTags and those linked to the NCMC accounts would not be impacted by the directives issued by the RBI. Additionally, Sharma reassured PayTM employees that the company would not be undergoing any layoffs and plans to seek partnerships with other banks for continued operations.

PayTM has formally petitioned the RBI for an extension of the 29th February ultimatum. The company also awaits clarity regarding the transfer of licenses for its FASTag operations and e-wallet services. Discussions are underway with both the RBI and the Minister of Finance to address remaining concerns.

The actions taken by the RBI have triggered an investigation by India's federal anti-fraud agency into possible violations of foreign exchange regulations within PayTM's platform.DFC Bank, a long-standing partner of PayTM, has extended its support during this difficult period. The bank is dedicatedly working with the fintech company to guide it through theregulatory environment.

While PayTM's shares indicated a positive increase after news about Sharma's meeting with the government officials, the stock has yet to regain its pre-difficulties level, reflecting existing worries among shareholders.

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