Paytm is more of a worry? Bank for Paytm Payments might lose its licence

The decision to close Paytm Payments Bank Limited follows multiple instances of failed due diligence, according to a report.

The Reserve Bank of India (RBI) may revoke the banking license of Paytm Payments Bank Limited (PPBL) within two weeks of the central bank’s deadline to cease operations, marking the first such action in over 20 years. An administrator may also be appointed to oversee critical bank operations.

Paytm Payments Bank Limited has been deemed guilty of multiple instances of failed due diligence, according to the statement.

The regulator has discouraged interested entities from acquiring Paytm Payments Bank, stating that they would be at their own risk and would not receive compliance dispensation. This has been a deterrent for any transaction to proceed.

On March 1, Paytm’s parent company, One97 Communications, has approved the discontinuation of several inter-company agreements with Paytm Payments Bank and terminated all its contracts with the bank.

The report suggests that Paytm Payment Bank’s existence is unlikely due to the RBI’s February 16 FAQ stating that no credits can be made to its savings account.

The RBI imposed business restrictions on PPBL due to norm violations, extending the deadline to March 15 after imposing restrictions on fresh deposits and credit transactions.

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