The auditor JC Bhalla & Co has informed Paytm Payments Bank that it must qualify the certification of its FY24 accounts with comments on the bank's viability
The report said a senior management of One97 Communications is also seeking an intervention from the Reserve Bank of India (RBI)
PPBL has strongly opposed the auditor's suggested qualifications, arguing that the Paytm brand’s strength will aid a revival plan and that there will be a capital infusion to facilitate this
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Paytm Payments Bank Ltd (PPBL) is reportedly at odds with its auditor JC Bhalla & Co over certification of its fiscal year 2024 accounts.
As per ET’s report, the auditor has informed the company that it must qualify the certification of its FY24 accounts with comments on the bank’s viability, given that business has come to a virtual standstill due to regulatory curbs.
Citing a source close to the matter, the report also said that the senior management of One97 Communications is also seeking an intervention from the Reserve Bank of India (RBI).
On the other hand, it is not expected that the RBI would possibly intervene until the annual report is filed.
“RBI has not given any indication to the PPBL that it would be allowed to resume operations (such as mobilise deposits and onboard new customers) nor has it set conditions such as completing KYC of accounts to restore permissions,” ET reported based on the source.
The source added, “In fact, the opportunity to rectify compliance matters has passed and now it is directed to wind down operations and transfer all businesses to One97 Communications.”
Inc42 has reached out to Paytm for comments on the development. The story will be updated based on the response.
Meanwhile, PPBL has strongly opposed the auditor’s suggested qualifications, arguing that the Paytm brand’s strength will aid a revival plan and that there will be a capital infusion to facilitate this.
In June alone, fintech companies such as Hitachi Payment Services, SabPaisa and Aurionpro Payment Solutions have been added to the list of licenced payment aggregators in India.
Paytm has been trying different means to help the company survive the high tide of regulatory scrutiny and prove its efficiency. The parent company One97 Communications has been considering workforce reduction to manage employee costs, potentially cutting around 15-20% of its employees in the current fiscal year.
The company, in May, said its associate entity Paytm General Insurance Ltd (PGIL) is withdrawing its general insurance licenses application, instead has intensified its focus to distribute insurance through its wholly owned subsidiary Paytm Insurance Broking Private Ltd (PIBL).
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