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NEW DELHI: Paytm founder Vijay Shekhar Sharma has resigned as the non-executive chairman and board member of Paytm Payments Bank Ltd (PPBL), the company said on Monday, as it faces regulatory hurdles from the Reserve Bank of India (RBI).
Sharma’s decision comes after the RBI asked PPBL to stop further deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards, by March 15, citing non-compliance with certain norms.
The RBI has also asked the National Payments Corporation of India (NPCI) to examine a request from Paytm to become a third party application provider and to facilitate four-to-five banks to act as service providers for it.Paytm, which is India’s third-largest app for UPI payments, is likely to partner with Axis Bank, HDFC Bank, State Bank of India and Yes Bank for processing transactions via the popular unified payments interface (UPI), two sources aware of the development told Reuters.
“Talks to onboard banking partners are on, and Paytm wants to start this process with large banks that have the technological bandwidth to handle large volumes seamlessly,” one of the sources told Reuters.
The persons did not want to be identified as they are not authorised to speak with the media.
HDFC Bank, Yes Bank, SBI, Paytm did not immediately respond to Reuters’ emails seeking comment. Spokespersons for Axis Bank and NPCI declined to comment.
“Paytm is likely to onboard Axis Bank as a banking partner first, and then rope in more banks,” the second source said.
The NPCI will take about a month’s time to check the bank’s technology and related infrastructure, the source said.
Paytm’s users will migrate to an updated UPI handle of the partner bank, the second person said.
“Any business with Paytm will only happen as per RBI’s regulatory orders,” Prashant Kumar, chief executive officer at Yes Bank said on Monday in an earlier interview.
“If there is clarity on the risks involved and if the business makes commercial sense to us, we have the capabilities.”
Paytm, which is backed by SoftBank, Alibaba and Berkshire Hathaway, has also set up an advisory committee headed by former chairman of Sebi M Damodaran to advise the company on strengthening compliance and on regulatory matters.
“We have been engaging with the group on matters relating to the Advisory Committee’s terms of reference,” Damodaran said on Sunday in response to a query about his engagement with Paytm.
Despite the challenges, Paytm’s shares surged 5% in early trading on Monday, indicating investor confidence in the company’s ability to navigate through the regulatory landscape and emerge resilient.
(With inputs from agencies)
Sharma’s decision comes after the RBI asked PPBL to stop further deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards, by March 15, citing non-compliance with certain norms.
The RBI has also asked the National Payments Corporation of India (NPCI) to examine a request from Paytm to become a third party application provider and to facilitate four-to-five banks to act as service providers for it.Paytm, which is India’s third-largest app for UPI payments, is likely to partner with Axis Bank, HDFC Bank, State Bank of India and Yes Bank for processing transactions via the popular unified payments interface (UPI), two sources aware of the development told Reuters.
“Talks to onboard banking partners are on, and Paytm wants to start this process with large banks that have the technological bandwidth to handle large volumes seamlessly,” one of the sources told Reuters.
The persons did not want to be identified as they are not authorised to speak with the media.
HDFC Bank, Yes Bank, SBI, Paytm did not immediately respond to Reuters’ emails seeking comment. Spokespersons for Axis Bank and NPCI declined to comment.
“Paytm is likely to onboard Axis Bank as a banking partner first, and then rope in more banks,” the second source said.
The NPCI will take about a month’s time to check the bank’s technology and related infrastructure, the source said.
Paytm’s users will migrate to an updated UPI handle of the partner bank, the second person said.
“Any business with Paytm will only happen as per RBI’s regulatory orders,” Prashant Kumar, chief executive officer at Yes Bank said on Monday in an earlier interview.
“If there is clarity on the risks involved and if the business makes commercial sense to us, we have the capabilities.”
Paytm, which is backed by SoftBank, Alibaba and Berkshire Hathaway, has also set up an advisory committee headed by former chairman of Sebi M Damodaran to advise the company on strengthening compliance and on regulatory matters.
“We have been engaging with the group on matters relating to the Advisory Committee’s terms of reference,” Damodaran said on Sunday in response to a query about his engagement with Paytm.
Despite the challenges, Paytm’s shares surged 5% in early trading on Monday, indicating investor confidence in the company’s ability to navigate through the regulatory landscape and emerge resilient.
(With inputs from agencies)
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