Paytm Payments Bank Has No Definite Timeline On Resuming Operations
Paytm Payments Bank hopes to get out of an RBI-imposed embargo this fiscal.
There is no definite timeline on as to when the Paytm Payments Bank will resume its operations, said the chief operating officer of the fintech giant was barred from onboarding new merchants in 2022.
However, Bhavesh Gupta, Paytm president and COO, is hopeful that the embargo will be lifted by March 2024.
In December 2020, One97 Communications Ltd., which owns the Paytm brand, had proposed to transfer the payment aggregator services business undertaken by it to Paytm in order to comply with the RBI's payment aggregator guidelines. However, the central bank rejected its application.
Two years later in November 2022, the RBI directed Paytm to re-submit its application to operate as a payment aggregator. The banking regulator then put a pause on onboarding online merchants by Paytm until approvals are pending. The reason for the ban could be violations related to know your customer, data storage, data privacy and outsourcing of data, among others.
Gupta, at the company's annual general meeting on Tuesday, said the company is working on these issues and is inching towards resolution. It has been nearly a year since the company has not onboarded any new online merchants.
"On Oct. 21, 2022 the bank received the final report thereof from RBI outlining the need for continued strengthening of IT outsourcing processes and operational risk management, including KYC/AML at the Bank," Paytm said in a report.
On the profitability front, the Group CFO Madhur Deora indicated that the fintech firm is about to turn into positive cash flow "soon". In the quarter ended June, Paytm's consolidated net loss narrowed to Rs 357 crore, compared with Rs 644 crore a year earlier. However, the loss has widened from Rs 168 crore reported in March quarter.
"Paytm has about Rs 1,300 crore cash balance," Deora said, adding that the company does not need additional funds for its operations. It is 100% debt free, he said.
Since its inception in 2009, Paytm has raised a total funding of Rs 38,504 crore from 76 institutional investors, including marquee names like Alibaba Group, SoftBank Vision Fund, BlackRock and more.
