RBI order to have impact of Rs 300-500 cr on annual operational profit: Paytm

The RBIs order to stop almost all services of Paytm Payments Bank after February 29 will have an impact of Rs 300500 crore on annual operational profit of the companyThe central bank on Wednesday barred Paytm from accepting deposits or topups in any customer account prepaid instruments wallets and FASTags among others after February 29 2024The action against Paytm Payments Bank Ltd PPBL followed a comprehensive system audit report and subsequent compliance validation report of external auditorsDepending on the nature of the resolution the company expects this action to have a worst case impact of Rs 300500 crore on its annual EBITDA going forward However the company expects to continue on its trajectory to improve its profitability Paytm said in a regulatory filingOne97 Communications Ltd OCL which owns Paytm brand holds 49 per cent stake in PPBL but classifies it as an associate of the company and not as a subsidiaryOCL as a payments company works with various banks not just Paytm Payments Bank on various payments products OCL started to work with other banks since starting of the embargo We now will accelerate the plans and completely move to other bank partners Going forward OCL will be working only with other banks and not with PPBL Paytm saidOn March 11 2022 RBI had barred PPBL from onboarding new customers with immediate effectThe next phase of OCLs journey is to continue to expand its payments and financial services business only in partnerships with other banks the filing saidPaytm said PPBL is taking immediate steps to comply with RBI directions including working with the regulator to address their concerns as quickly as possibleThe company has been informed that this does not impact user deposits in their savings accounts Wallets FASTags and NCMC accounts where they can continue to use the existing balances the filing saidThe Paytm Payment Gateway business online merchants will continue to offer payment solutions to its existing merchantsOCLs offline merchant payment network offerings like Paytm QR Paytm Soundbox Paytm Card Machine will continue as usual where it can onboard new offline merchants as well the filing saidRBI also said the nodal accounts of OCL and Paytm Payments Services PPSL are to be terminated at the earliest in any case not later than February 29 2024 The filing said that OCL and PPSL will move the nodal to other banks during this periodOCL will pursue partnerships with various other banks to offer various payment products to its customers Paytm saidThe company said that its financial services such as loan distribution insurance distribution and equity broking are not in any way related to PPBL and are expected to be unaffected by this directionThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever