While executives of the bank, including founder Vijay Shekhar Sharma, met RBI officials on Monday, they called on the FM on Tuesday.
What transpired at the meeting in North Block was not immediately known but govt is likely to maintain a hands-off approach, indicating that the regulator would be responsible for decision-making. In an interview with TOI over the weekend, Sitharaman had indicated as much. “It is for the regulator and the company to deal with each other,” she had said, while refraining from commenting further.
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Earlier, Paytm executives also engaged with officials from a on Monday to provide updates on their compliance efforts and seek clarity on the new directive. Their immediate concern revolves around retaining the virtual payment address @paytm for both app users and merchants and facilitating the one-time migration of merchant bank accounts.
Shares of Paytm rose on Tuesday to close 3% higher after hitting the lower circuit for three straight trading days after the RBI ban. A clarification from Jio Financial Services that it was not in talks to acquire Paytm’s business contributed to the gain. Shares of Jio Financial Services fell 6%, reversing some of the 14% gains on Monday.
During the meeting with the minister, Paytm expressed concern regarding the prohibition on adding money to Paytm Payments Bank accounts and wallets from March and the Fastag ban, highlighting the potential disruption due to the extensive number of affected accounts, many of which have standing instructions and linkages to other accounts, causing inconvenience to customers.
Paytm has been discussing with banks to explore the feasibility of migrating merchant bank accounts or customer wallets. However, banks were keen on only those accounts that offered sizeable deposits or fee income. A senior banker said there was no clarity on which businesses could be retained or transferred, and they expected more information in the coming days.
In its discussions with RBI, the company had sought refuge in the argument that non-KYC wallets are a legacy issue stemming from digital wallets opened during the demonetisation period when wallets were permitted to be loaded with minimal KYC requirements. Initially, minimum KYC norms allowed for the opening of wallets with basic details, including a verified mobile number and a self-declaration of name and unique identification number.