One97 Communications to expand its existing relationships with leading third-party banks
New Delhi, Feb 1 (IANS) One97 Communications (OCL) has said that it has been informed by its associate, Paytm Payments Bank Limited (PPBL), that the Reserve Bank of India (RBI) vide its press release dated January 31, 2024 has given it further directions under Section 35A of the Banking Regulation Act, 1949.
PPBL is taking immediate steps to comply with RBI’s directions, including working with the regulator to address its concerns as quickly as possible. The company has been informed that this does not impact user deposits in their savings accounts, Wallets, FASTags, and NCMC accounts, where they can continue to use the existing balances.
OCL, as a payments company, works with various banks (not just Paytm Payments Bank) on various payments products. OCL started to work with other banks since starting of the embargo.
“We will now accelerate the plans and completely move to other bank partners. Going forward, OCL will be working only with other banks, and not with Paytm Payments Bank Limited. The next phase of OCL’s journey is to continue to expand its payments and financial services business, only in partnership with other banks,” the company said.
“We offer acquiring services to merchants in partnership with several leading banks in the country and will continue to expand third-party bank partnerships. The Paytm Payment Gateway business (online merchants) will continue to offer payment solutions to its existing merchants.
“OCL’s offline merchant payment network offerings like Paytm QR, Paytm Soundbox, and Paytm Card Machine will continue as usual, where it can onboard new offline merchants as well”, it said.
With regard to the direction on termination of nodal account of OCL and Paytm Payments Services Limited (PPSL) by February 29, 2024, OCL and PPSL will move the nodal to other banks during this period.
OCL’s other financial services such as loan distribution, insurance distribution and equity broking are not in any way related to Paytm Payments Bank Limited and are expected to be unaffected by this direction.
Depending on the nature of the resolution, the company expects this action to have a worst case impact of Rs 300 to 500 crore on its annual EBITDA going forward. However, the company expects to continue on its trajectory to improve its profitability.
“Separately, in response to market rumours, our founder has reconfirmed to us that he has not taken any margin loans, or otherwise pledged any shares that are directly or indirectly owned by him,” the company said.