India’s RBI orders Paytm Payments Bank to halt banking services by end of February
- The Reserve Bank of India (RBI) has directed Paytm Payments Bank to cease accepting deposits, providing credit services, and facilitating fund transfers from 29 February.
- Paytm Payments Bank is instructed to stop onboarding new customers immediately and settle all pipeline transactions initiated on or before 29 February by 15 March.
- RBI cites “persistent non-compliances and continued material supervisory concerns” as reasons for the regulatory action.
- Paytm Payments Bank, an independent subsidiary of One 97 Communications, is collaborating with RBI to address concerns and ensure compliance.
- One 97 Communications plans to “accelerate” its shift to other bank partners, terminating its working relationship with Paytm Payments Bank.
- The termination is expected to have a potential worst-case impact of $36.1 million to $60.2 million on annual EBITDA for One 97 Communications.
- The company reassures that its loan distribution, insurance distribution, and equity broking services will remain unaffected by the regulatory order.