Paytm’s wallet business is reportedly the first victim of the Reserve Bank of India’s (RBI) ban on Paytm Payments Bank. The central bank, for the unversed, announced a ban on Paytm’s Payments Bank services in which the wallet, Fastag, and other services are also barred. No top-ups are allowed and once the money in these wallets and services is used, they will no longer be useful.
That said, Paytm will be facing a huge loss. As per a report from The Hindu Business Line, Paytm was in talks with a few investors to sell its wallet business for some time. HDFC Bank and Jio Financial Services were among the forerunners to acquire the same.
The report citing experts further stated that Paytm has been in talks with Jio Financial Services for the deal since November 2023. That’s way before the RBI ban. Now, with the RBI ban in the picture, Paytm’s intent of selling the wallet business has reportedly increased to ensure continuity for Paytm’s existing wallet users.
As of now, it’s unclear, whether Jio will accept the deal and move with the acquisition or if it has some other plans. There’s no official information from none of the parties – Jio, Paytm, or HDFC Bank as of now.
The latter has been Paytm’s banking partner for a while. However, it already has its own payment wallet dubbed Payzapp HDFC Bank which has 14 million users.
It is worth noting that Paytm is the largest player in the wallets segment in India. The firm owned by One97Communications not only offers wallet and bank services, but has a plethora of other services. This includes services like mobile recharge, bill payments, movie and travel ticket bookings, insurance, and more.
As per RBI’s ban announced on January 31, under section 35A of the Banking Regulations Act, 1949, only the Paytm Payments Bank Ltd (PPBL) is affected. What that means is that top-ups and transactions on the following services will be blocked from February 29: Wallets, FASTags, NCMC cards.
“No further deposits or credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29,
2024, other than any interest, cashback, or refunds which may be credited anytime,” stated the latest press release.
The Paytm app, including the services that are not tied to PPBL, will continue to work as it is. The company’s CEO Vijay Shekhar Sharma assured users the same last week.
“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,” Sharma posted on X (formerly Twitter).Get latest Tech and Auto news from Techlusive on our WhatsApp Channel, Facebook, X (Twitter), Instagram and YouTube.
Author Name | Pranav Sawant