Page 29 - BANKING FINANCE MARCH 2024

ARTICLE

PAYTM

FIASCO

T his year, on January 31, the Reserve Bank of India PPBL started its operations as a payments bank in May 2017
(RBI) ordered Paytm Payments Bank Limited
and offers digital banking services, including savings
(PPBL) to stop onboarding new customers after
accounts, current accounts, fixed deposits with partner
February 29, 2024. The RBI also directed PPBL
to refrain from accepting further deposits, conducting credit banks, and balance in wallets, UPI, and FASTag services.
transactions, or carrying out top-ups on any customer's The RBI's decision to clamp down on Vijay Shekhar Sharma-
accounts, prepaid instruments, wallets, or cards for paying run entities came after concerns over money laundering and
road tolls after February 29, 2024. However, no restrictions questionable dealings involving hundreds of crores of rupees
were imposed on the current customers who can continue between Paytm and its lesser-known banking arm. According
to use their balance until it is exhausted. They will not be to sources, PPBL had lakhs of non-KYC-compliant accounts,
able to add money after February 29, 2024. and in thousands of cases, single PANs were used for
opening multiple accounts. There were instances where the
PPBL is a subsidiary of One97 Communications Limited (OCL), total value of transactions exceeded the regulatory limits
which holds 49% of the paid-up share capital (directly and in minimum KYC pre-paid instruments, raising money
through its subsidiary) of PPBL. The managing director of laundering concerns.
PPBL, Vijay Shekhar Sharma, has a 51% stake in the bank.
'Paytm Karo' - no more melodious
The popular "Paytm karo" jingle may sound like noise to
some these days, and the blame for this lies with the
management of the OCL. Although it has been
communicated to every Paytm user that the app will
continue to function as usual beyond 29th February 2024,
this may seem like an overly confident statement from a

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