Prashant Kumar, managing director and chief executive officer of Yes Bank, stated that the bank is amenable to taking over the merchants that Paytm Payments Bank Ltd (PPBL) has purchased.

Paytm boasts a substantial client base among merchants, making it an excellent potential for Yes Bank. We are willing to acquire merchant accounts. Even if these vendors deal with around Rs 25,000 a day on average, it's still a significant potential, Kumar stated during a press conference in Bengaluru, according to reports. 

The regulator makes it very clear that we are unable to transfer risk to another party. We need to make sure that any risks that have been discovered in compliance or elsewhere inside Paytm (and PPBL) that have prompted regulatory action are not transferred to other firms, but are instead addressed and resolved, continued Kumar.

Paytm is a third-party application provider (TPAP) player that has previously collaborated with Yes Bank, Axis Bank, and HDFC Bank to operate its UPI services.

Speaking on the subject, Kumar emphasized the growth of Yes Bank's presence in the digital payments market as well as the possible advantages of such an acquisition. Yes Bank wants to expand its client base and improve the services it offers by integrating Paytm Payments Bank's merchant accounts.

The action also highlights the competitive dynamics that exist within the fintech sector in India, where established banks are trying to use acquisitions and partnerships to stay relevant in a world that is becoming more and more digital. Using the merchant network of Paytm Payments Bank, Yes Bank hopes to increase its market share and spur growth in the digital payments space.

Due diligence procedures and regulatory permissions are prerequisites for the possible purchase. It is anticipated that Yes Bank and Paytm Payments Bank would converse and bargain to work out the intricacies of the agreement.