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Since the Reserve Bank of India (RBI) forbade the payment bank from taking any deposits or credits to user accounts, Paytm has been facing an existential crisis.
Following a newspaper story claiming that One 97 Communications, the parent company of Paytm, is in discussions to sell its wallet business to the Mukesh Ambani-owned NBFC and private sector lender HDFC Bank, Jio Financial Services shares surged up to 14% to the day’s high at ₹288.75 on the BSE.
According to a report by The Hindu Business Line, Jio Financial and HDFC Bank are reportedly in the lead to buy Paytm’s wallet division. According to the source, Paytm CEO Vijay Shekhar Sharma’s team has been in talks with Jio Financial since last November; however, talks with HDFC Bank started right before the RBI suspended Paytm Payments Bank.
On Paytm’s existential crisis
Jio may offer to buy Paytm Payments Bank as part of a larger rescue plan, as Paytm is going through a serious existential crisis after the Reserve Bank of India (RBI) prohibited the payment bank from taking any new deposits or credits from customer accounts.
It was previously stated that agencies are investigating the possibility that the organization is being utilized as a front for laundering money. While Paytm’s shares dropped 42% in just three days after the RBI directive, the business denied all accusations and stated that neither the company nor its founder or CEO are under investigation by the Enforcement Directorate for alleged money laundering.
Owned by Jio Financial, Jio Payments Bank relaunched as a digital savings account and bill-paying platform. It also launched debit cards, with a ground network of 2,400 business correspondents. Jio has implemented QR codes throughout the ecosystem, activated Jio phones using UPI, and launched a test program for Jio Voice boxes.
There is nothing to be concerned about, according to Paytm CEO Vijay Shekhar Sharma, at a virtual town hall with Paytm Payment Bank Ltd (PPBL) staff.
“You are safe and secure because you are a member of the Paytm community. We are receiving assistance from numerous banks. We don’t know everything—for exactly what went wrong. However, we will shortly figure things out. To find out what may be done, we shall get in touch with the RBI,” he said.
