RBI's directive only affects Paytm Payments Bank, not Paytm App
Feb 02, 2024
New Delhi [India], February 2 : Paytm, the pioneer of QR and mobile payments in India, has said that its app is working and will continue to work after February 29 as well, adding that the directive issued by the Reserve Bank of India (RBI) will affect only its associate bank and not the fintech company.
Paytm's founder and CEO, Vijay Shekhar Sharma, also posted about the functioning of the Paytm app and appreciated the support the company is getting.
"To every Paytmer, Your favourite app is working, will keep working beyond 29 February 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 serve 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," he posted on X.
https://twitter.com/vijayshekhar/status/1753261279324643602
Earlier on Thursday, Madhur Deora, President and Group CFO at Paytm also clarified that Paytm and its associate bank are not and cannot be one.
"There may be this impression that Paytm and Paytm Payment Bank is one, but by design and by structure, it is not and it cannot be. First it is an associate company and second is not an associate company in the sense that is some Bank. And first and foremost for a bank is that, it has to follow the governance that a bank is supposed to follow, which is to say that has to has its independent management team, which reports to the board and the matters that have to go to committees of the board where can only be independent directors," he explained in an address to the analysts.
Paytm, as a payments company, works with various banks (not just Paytm Payments Bank), on various payments products. The company has been working with other banks for the past two years and will now accelerate the plans and completely move to other bank partners.
The next phase of the company's journey is to continue to expand its payments and financial services business, only in partnerships with other banks.
The fintech company in an exchange filing also stated that its associate bank is run independently by its management and board.
"We would take this opportunity to clarify that as per banking regulations, Paytm Payments Bank Limited is run independently by its management and board. While OCL is allowed to have two board seats on the board of Paytm Payments Bank Limited, as a part of its shareholder agreement, OCL exerts no influence on the operations of Paytm Payments Bank Limited, other than as a minority board member, and minority shareholder," the company stated.
