One 97 Communications Limited (OCL), the parent company of Paytm Payments Bank, announced a day after the Reserve Bank of India (RBI) prohibited the bank from taking new deposits starting on February 29. OCL stated that the company is already collaborating with other banks and will expedite its plans to shift entirely to third-party partners.
The business stated in a regulatory filing that "OCL, as a payments company, works with various banks (not just Paytm Payments Bank), on various payments products."
"We are going to speed up the plans and switch over entirely to other financial partners. OCL will not be collaborating with Paytm Payments Bank Limited going ahead; instead, it will only deal with other banks. OCL's next step is to keep growing its financial services and payments business—but only in collaboration with other banks," the statement continued.
The business also stated that it anticipates an effect on its yearly EBITDA of between Rs 300 and 500 crore as a result of this action. "Persistent non-compliance" and "material supervisory concerns" were the reasons given by the RBI for the order. In March 2022, it had prohibited the bank from accepting new clients. On Thursday, the company's stock fell 20%, hitting the lower circuit.
OCL stated in the filing that it will continue to onboard new offline merchants and that its offline merchant payment network solutions, including Paytm QR, Paytm Soundbox, and Paytm Card Machine, will operate as usual. Furthermore, the Paytm Payment Gateway company (online retailers) will keep providing payment options to its current clients.
"The company has been informed that this does not impact user deposits in their savings accounts, Wallets, FASTags, and NCMC accounts, where they can continue to use the existing balances," it stated.
The document further stated that OCL's financial services, which include equities broking, insurance distribution, and loan distribution, are likely to remain "unaffected" and have no connection to Paytm Payments Bank Ltd.
