Paytm CEO Meets FM Sitharaman Seeking Extension In February Deadline

On February 6th, the Chief Executive Officer of Paytm had a meeting with India's Finance Minister after the Reserve Bank of India (RBI) ordered the payment bank to freeze operations by the end of February 2024. The company is under regulatory scrutiny for compliance issues, supervisory concerns and questionable adherence by both the central bank and the Ministry of Finance. Vijay Shekhar Sharma, the face of the payments bank is seeking an extension for the deadline set by the RBI till 29th February 2024. They also request for the transfer of the e-wallet business licence and Fastag toll payment services.

As per the news reports, the Paytm CEO was allowed a ten-minute meeting with Finance Minister Nirmala Sitharaman and the Department of Financial Services (DFS) Secretary, Mr Vivek Joshi today. The company is expecting the government to bail them out at this moment of crisis, which the ministry denied citing that they have no role to play in the latest RBI restrictions and regulatory issues are to be sorted out with the central bank. Vijay Sharma met with the RBI officials yesterday to discuss the regulatory concerns.

As per the Paytm spokesperson, the allegations made by the Enforcement Directorate are unfounded and factually incorrect after the central agency pleaded with RBI's help relating to transactions through the Paytm platform. The investigation is covering the parent company, One97 Communications involvement in foreign exchange violations, alleging multiple unverified accounts used for transactions valued at crores, which the Paytm Payments bank denies fiercely.

The move by India's central bank has resulted in major cities as a wave of uncertainty for Indian merchants, as they cover up the Paytm QR code for accepting payments. The company is reportedly sending sales staff to shops and merchants to push them towards Paytm-partnered banks to ensure the transactions still exist in the platform. Amidst the unsteady and agitated exit of Paytm's customer base, HDFC clarifies that the bank has only a professional partnership with the payment bank's parent company, One97 Communications.

In 2016, Paytm repeatedly published vaunting greetings and appreciation quotes on Prime Minister Modi for his master stroke of demonetisation, pushing millions of citizens towards electronic transactions and cashless activities, for curbing the exchange of black money in the Indian economy. Over the years it developed and portrayed itself as one of the safest modes for making payments, e-wallet services, virtual investments, and subscriptions. The same company is now being investigated with the raised eyebrows of RBI for money laundering and multiple regulatory charges.

Shares of the 'Once Largest Payment App in India', as of 7th February 2024 are trading at Rs. 496.25/-, which have risen almost 10% or Rs. 45/- since the previous session. The strong spike in prices is pushed despite the ongoing crises faced by the company and has stayed more than 18% down since the RBI crackdown began early this month.