Zomato Subsidiary Voluntarily Withdraws NBFC Licence Application

Foodtech major Zomato on Tuesday (July 2) said that its wholly-owned subsidiary Zomato Financial Services Limited (ZFCL) has decided to voluntarily withdraw its application with the Reserve Bank of India to operate as an non-banking financial company (NBFC).

In an exchange filing, the company said that it no longer wishes to pursue the lending/credit business.

The decision to withdraw the application was taken by the board of directors of ZFSL at a meeting held on July 2, the filings showed.

The company further said that the move will have no material impact on its revenues and operations.

The development comes days after Zomato’s subsidiary Zomato Payment Private Limited (ZPPL) surrendered its payment aggregator licence.

It is pertinent to note that Zomato, earlier this year, was said to be in talks with multiple NBFCs to offer working capital loans to its partner restaurants.

While Zomato incorporated ZFCL in 2022, ZPPL was incorporated in 2021, as part of the company’s broader digital lending plans.

The development comes at a time when the RBI has been cracking down on NBFC companies and certain fintechs due to lapses in governance and regulatory compliance.

Earlier this year, the RBI issued draft papers to regulate online payment aggregators, mandating physical KYC verification for merchant onboarding.  

Meanwhile, shares of Zomato touched an all-time high of INR 209.80 during Tuesday’s intraday trading session on the BSE.

The surge in the stock’s price came after Zomato announced that it has received approval from its shareholders to create a new employee stock option pool of 18.26 Cr shares.

Earlier this week, Zomato was slapped with a goods and services tax (GST) demand notice of INR 9.45 Cr by the Assistant Commissioner of Commercial Taxes (Audit) in Karnataka.

Last month, the company launched a new platform in a bid to support restaurants in the recruitment process, as part of its broader portfolio expansion plans.