SUMMARY
Amid the ongoing troubles at Paytm, Vijay Shekhar Sharma has voiced his confidence in making a strong comeback by overcoming regulatory hurdles
The RBI on January 31 barred Paytm Payments Bank from taking any deposits, credit transactions, or top-ups in any of its customer accounts
Paytm shares are trading 47% down from January 31 at INR 404.1 on the BSE
Amid the ongoing troubles at paytm
, following the RBI clampdown on Paytm Payments Bank, the founder of the Indian fintech giant, Vijay Shekhar Sharma, has voiced his confidence in making a strong comeback by overcoming regulatory hurdles.
As per a Bloomberg report, Sharma said at a financial technology conference in Tokyo that he wants to make Paytm a market leader in Asia.
“Asia has an opportunity to build a financial system for the next generation,” Sharma was quoted as saying. “Make Paytm an Asia leader — in my lifetime, I would like to do that.”
It is pertinent to note that the RBI on January 31 barred Paytm Payments Bank from taking any deposits, credit transactions, or top-ups in any of its customer accounts.
The central bank also stopped the company from other banking services, including UPI facility and fund transfers after February 29, 2024.
The deadline was later extended to March 15. However, this is expected to have an impact on Paytm (both directly and indirectly), including the loss of merchant accounts.
“The biggest thing that I’ve learned is that many times your teammate and adviser may not be getting it correct,” Sharma reportedly said speaking at the conference. “And it is important for you, yourself to be taking care of it versus just letting a teammate or an adviser suggest what should it be.”
Meanwhile, he also said that he values the role that regulators play in creating a healthy environment for startups in India.
“We have been able to very happily see our regulator engage,” Sharma was quoted as saying.
We must note that amid the fiasco at the payments bank, Sharma stepped down from the board of Paytm Payments Bank last month. Paytm also announced discontinuing various inter-company agreements with Paytm Payments Bank last week.
Amid the ongoing problems, the Financial Intelligence Unit-India (FIU-IND) imposed a monetary penalty of INR 5.49 Cr on Paytm Payments Bank for violations of norms under the Prevention of Money Laundering Act (PMLA). However, the company issued a statement later saying the penalty pertains to issues within a business segment that was discontinued two years ago.
Shares of Paytm halved within a few days following the RBI’s crackdown on the payments bank. Currently, its shares continue to remain highly volatile and are under selling pressure. Several brokerages have also raised concerns about the impact of the regulatory actions on Paytm’s top and bottom lines in FY24 and FY25, with its path to profitability stretching further.
Paytm shares are trading 47% down from January 31 at INR 404.1 on the BSE.
