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New Delhi, <keyword id="20004114" type="General" weightage="20" keywordseo="vijay-shekhar-sharma" source="keywords">Vijay Shekhar Sharma</keyword>, one of the most recognised faces of India's fintech industry, has seen a fair share of controversies. Sharma launched <keyword id="19898109" type="General" weightage="20" keywordseo="paytm" source="keywords">Paytm</keyword> - an acronym for 'pay through mobile' - offering mobile recharges. He launched wallet services in 2011 but the big push came with the 2016 demonetisation. He took out front-page ads in top newspapers with Prime Minister Narendra Modi's photo, calling demonetisation the "boldest decision in the financial history of independent India". With fewer currency notes in circulation, Paytm was on a roll. Sharma made a splash in 2018 by getting USD 300 million investment in Paytm from <keyword id="19921921" type="General" weightage="20" keywordseo="warren-buffett" source="keywords">Warren Buffett</keyword>'s Berkshire Hathaway. *Controversies* Paytm was mired in controversies with its Chinese connection following huge investments from Alibaba Group. The Chinese internet firm became the biggest shareholder in Paytm with a 34.7 per cent stake before the company's initial public offer. Alibaba group firm Antfin sold around 5 per cent shares to lower its stake below 25 per cent to comply with regulatory requirements at the time of IPO. To shed its Chinese-owned entity image, Paytm in August 2023 announced that founder and CEO Vijay Shekhar Sharma would acquire a 10.3 stake in Antfin through his overseas entity Resilient Asset Management BV which will make him the largest stakeholder in the company with 19.42 per cent stake. In return, Resilient issued a debt instrument --optionally convertible debentures, to Antfin thereby maintaining the economic interest of Alibaba group firm. With this transaction, Antfin's direct stake in Paytm was reduced to 13.5 per cent. Antfin further sold 3.6 per cent in Paytm to bring its shareholding to less than 10 per cent and at present holds 9.89 per cent of the fintech firm. The company's market cap has eroded drastically since the time of its listing. The company's IPO opened on November 8, 2021, in the price band of Rs 2,080-2,150 per share. The Paytm IPO made history with over Rs 18,300 crore share sale 'making it the largest public issue in India's corporate history. But the company's stock made a weak debut in the market on November 18 and hit a lower circuit after recording about 20 per cent decline during trading hours. It finally closed at Rs 1,560, down by about 27 per cent, compared to its issue price of Rs 2,150. Since then, Paytm shares have not been able to cross even half the mark of the issue price. After the <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword>'s January 31 move, One97 Communications shares tanked around 40 per cent to close at Rs 487.05 on BSE on Friday. Billionaire businessman <keyword id="19952201" type="General" weightage="20" keywordseo="warren-buffet" source="keywords">Warren Buffet</keyword>'s Berkshire Hathaway sold its stake in Paytm at a loss of 31 per cent per share in November 2023. Berkshire Hathaway had invested in Paytm for about Rs 1279 per share but sold it for Rs 877.29 apiece. At present, Cayman Island-registered SAIF III Mauritius Company Limited is the single largest direct shareholder in Paytm with a 10.83 stake followed by Sharma's Resilient Asset Management BV with a 10.29 per cent stake. SAIF Partners is led by Chinese-origin entrepreneurs with Andrew Y Yan as its managing partner. *Paytm run-ins with RBI* RBI on June 19, 2018, prohibited Paytm Payments Bank from opening any new account and wallet with effect from June 20, 2018, on account of supervisory concerns, which were lifted by RBI on December 27, 2018, with effect from December 31, 2018. The Office of Banking Ombudsman issued a show-cause notice dated March 6, 2019, for Paytm Payments Bank's failure to monitor a certain account maintained with it which had shown a sudden increase in the velocity of daily transactions involving immediate transfer to other banks. The actions were found to be in the violation of RBI's provisions on KYC. RBI rejected Paytm Payments Services Ltd's (PPSL) application to operate as a payment aggregator on November 25, 2022. The banking regulator asked the firm to re-submit applications within 120 days after it gets government approval on investment made by OCL into PPSL as per FDI guidelines. The regulator asked PPSL to continue operations with the condition that no new merchants should be onboard. After completion of 120 days, RBI again granted PPSL an extension but without removing the bar on new merchant onboarding. RBI issued a show cause notice to PPBL on July 29, 2021 for submitting false information to RBI confirming completion of the transfer of the Bharat Bill Payment Operating Unit ("BBPOU") by OCL to PPBL on August 28, 2017. The actual transfer of the BBPOU business by the Company to PPBL was completed only by March 31, 2021. RBI on October 1, 2021, imposed a penalty amounting to Rs 1 crore on PPBL for a contravention of the Payment and Settlement Systems Act, 2007. RBI imposed a penalty of Rs 5.93 crore on PPBL on October 10, 2023, after it found several non-compliances including banks failure to identify beneficial owners in respect of entities on-boarded by it for providing payout services. RBI found that PPBL did not monitor payout transactions and carry out risk profiling of entities availing payout services, breached the regulatory ceiling of end of the day balance in certain customer advance accounts availing payout services. The banking regulator found that PPBL reported a cyber security incident with delay and failed to implement device binding control measures related to 'SMS delivery receipt check'. PPBL video-based customer identification process infrastructure failed to prevent connections from IP addresses outside India.

Vijay Shekhar Sharma: The controversies of the architect of fintech

Digital payments and services app <keyword id="19898109" type="General" weightage="20" keywordseo="paytm" source="keywords">Paytm</keyword> is working and will continue to work as usual even after February 29, its CEO <keyword id="20004114" type="General" weightage="100" keywordseo="vijay-shekhar-sharma" source="keywords">Vijay Shekhar Sharma</keyword> said on Friday. The founder and CEO of One97 Communications Ltd (OCL), which owns Paytm brand, on social media platform X said the company is committed to serving the nation in full compliance. "To every Paytmer, Your favourite app is working, will keep working beyond 29 February as usual," Sharma said. RBI has barred Paytm Payments Bank Ltd (PPBL) from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, and FASTags, among others after February 29, 2024. OCL holds a 49% stake in PPBL but classifies it as an associate of the company and not as a subsidiary. "I with every Paytm team member salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance. India will keep winning global accolades in payment innovation and inclusion in financial services - with PaytmKaro as the biggest champion of it," Sharma said. The Paytm top management during an earning call on Thursday said they are working on a migration plan for PPBL, wallet, FASTag etc users with other banks. The company sees the RBI order to have an impact of Rs 300-500 crore on its annual operational profit as its customers will not be able to add money to their wallets, FASTag etc. Separately, the company informed that its offline merchants network offering and device business like Paytm Soundbox, EDC, QR are not impacted by the Reserve Bank of India's (RBI) direction to its associate bank. The fintech company will also continue onboarding merchants to its platform. "The Paytm Payment Gateway business (online merchants) will continue to offer payment solutions to its existing merchants. Other financial services such as loan distribution, insurance distribution and equity broking, are also not in any way related to Paytm's associate bank and are expected to be unaffected by this direction," the company said. Paytm said that the RBI order also does not impact user deposits in their savings accounts, wallets, FASTags and NCMC (National Common Mobility Card) accounts, and they can continue to use the existing balances. RBI has ordered PPBL to settle all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) by March 15, 2024 and no further transactions would be permitted thereafter. Sharma during the call had said that RBI order is a "big speed bump" and shared that he could not understand the trigger for the move and he was not aware of the exact nuance that triggered the order. "On behalf of Paytm I can say it is more of a big speed bump but it is something that we believe that with partnership of other banks and capabilities that we have already developed, we will be able to see through in the next few days or quarters as the case will be," he had said.

Paytm app will continue to work beyond Feb 29 as usual: CEO Vijay Shekhar Sharma

Mumbai, <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> on Friday said NPCI has been asked to examine the possibility of it becoming a third party application provider for continued <keyword id="19900911" type="General" weightage="20" keywordseo="upi" source="keywords">UPI</keyword> operations of the Paytm app. The central bank has barred <keyword id="19907220" type="General" weightage="20" keywordseo="paytm-payments-bank" source="keywords">Paytm Payments Bank</keyword> from accepting further credits into its customer accounts and wallets after March 15, 2024. With an aim to ensure seamless digital payments by UPI customers using '@paytm' handle operated by the Paytm Payments Bank, <keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> said it has asked the <keyword id="19907219" type="General" weightage="20" keywordseo="national-payments-corporation-of-india" source="keywords">National Payments Corporation of India</keyword> (NPCI) to examine the request to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app. The request has been made by One97 Communication Ltd (OCL), which owns the Paytm brand, RBI said in a statement. For seamless migration of '@paytm' handle to other banks, the Reserve Bank of India (RBI) said NPCI may facilitate certification of 4-5 banks as Payment Service Provider (PSP) Banks with demonstrated capabilities to process high volume UPI transactions.

Reserve Bank asks NPCI to help continue operations of Paytm app

<ul><li><keyword id="6357120" type="General" weightage="100" keywordseo="paytm" source="Orion">Paytm</keyword> said <keyword id="1426939" type="General" weightage="80" keywordseo="ppsl" source="Orion">PPSL</keyword> has now received a letter from <keyword id="30067" type="General" weightage="80" keywordseo="rbi" source="Orion">RBI</keyword> in response to an application for the authorisation to provide PA services for online merchants.</li><li>Paytm, in the regulatory filing, said it can resubmit the PA application within 120 calendar days.</li><li>The company will not onboard new online merchants till the time approvals remain pending.</li></ul> Banking regulator RBI has put a pause on onboarding of online merchants by <keyword id="12003494" type="General" weightage="50" keywordseo="paytm-payments-services" source="Orion">Paytm Payments Services</keyword>, even as the company said it will have no material impact on its business, according to a regulatory filing. One97 Communications (OCL), which owns the Paytm brand, had proposed to transfer the payment aggregator services business undertaken by it to Paytm Payments Services (PPSL) in December 2020 to comply with payment aggregator (PA) guidelines of the <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (RBI) but the banking regulator had rejected its application. The company had re-submitted the required documents in September 2021. Paytm said PPSL has now received a letter from RBI in response to an application for the authorisation to provide PA services for online merchants. As per the letter, PPSL is required to "Seek necessary approval for past downward investment from the company into PPSL, to comply with FDI Guidelines" and "not onboard new online merchants". Paytm, in the regulatory filing, said it can resubmit the PA application within 120 calendar days. The company will not onboard new online merchants till the time approvals remain pending. PAs are entities that facilitate e-commerce sites and merchants to accept various payment instruments from customers for completion of their payment obligations without the need for merchants to create a separate payment integration system of their own. According to RBI's PAs guidelines, a single entity cannot continue to provide an e-commerce marketplace along with payment aggregator services and such payment aggregator services must be separated from the e-commerce marketplace business. Paytm further said there were no material observations from RBI and the move has no material impact on its business and revenues since the communication from the central bank is applicable only to onboarding of new online merchants. "We can continue to onboard new offline merchants and offer them payment services including All-in-One QR, <keyword id="10896801" type="General" weightage="50" keywordseo="soundbox" source="Orion">Soundbox</keyword>, <keyword id="3885098" type="General" weightage="50" keywordseo="card-machines" source="Orion">Card Machines</keyword>, etc. Similarly, PPSL can continue to do business with existing online merchants, for whom the services will remain unaffected. We are hopeful of receiving the necessary approvals in a timely manner and resubmitting the application," Paytm said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/over-50-of-microbusinesses-had-no-mechanisms-to-cushion-covid-impact-road-to-recovery-report-says/articleshow/95780667.cms">Over 50% of microbusinesses had no mechanisms to cushion Covid impact, Road to Recovery report says</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/elon-musk-may-produce-alternative-smartphones-to-compete-with-apple-android/articleshow/95780494.cms">Elon Musk may produce 'alternative' smartphones to compete with Apple, Android</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/india-sees-a-single-day-rise-of-new-389-coronavirus-infections-tally-rises-to-530608/articleshow/95779680.cms">India sees a single-day rise of new 389 coronavirus infections, tally rises to 5,30,608</a>

RBI pauses onboarding of online merchants by Paytm Payments Services; firm says no material impact on biz

The RBI on Friday asked <keyword id="3236791" type="General" weightage="20" keywordseo="paytm-payments-bank" source="Orion">Paytm Payments Bank</keyword> to stop opening new accounts amid “material supervisory concerns” observed in the bank. “Reserve Bank of India has today, in exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed <keyword id="6357120" type="General" weightage="20" keywordseo="paytm" source="Orion">Paytm</keyword> Payments Bank Ltd to stop, with immediate effect, onboarding of new customers,” the central bank said in a statement. The bank has also been directed to appoint an IT audit firm to conduct a comprehensive system audit of its IT system. “Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank,” it said. Paytm Payments Bank was incorporated in August 2016 and formally began its operations in May 2017 from a branch in Noida. In December 2020, the RBI had barred HDFC Bank from launching any new digital products or services and issuing new credit cards till the lender resolved recurring tech issues. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/business/startups/news/info-edges-latest-acquisition-aisle-explains-why-it-was-difficult-for-them-to-raise-funds/articleshow/90145724.cms">INTERVIEW: Info Edge’s latest acquisition Aisle’s founder explains why it was difficult for him to raise funds</a> <a href="https://www.businessinsider.in/business/startups/news/boat-has-rejigged-its-entire-upper-management-in-the-run-up-to-the-ipo/articleshow/90140785.cms">BoAt has rejigged its entire upper management in the run up to the IPO</a> <a href="https://www.businessinsider.in/stock-market/news/wipro-colgate-lupin-among-hot-stocks-to-watch-out-for-on-march-11/slidelist/90139884.cms">Wipro, Colgate, Lupin among hot stocks to watch out for on March 11</a>

RBI stops Paytm Payments Bank from opening new accounts

<keyword id="3236791" type="UNKNOWN" weightage="100" keywordseo="Paytm-payments-bank">Paytm Payments Bank</keyword> has become operational from today onward and your current <keyword id="6357120" type="UNKNOWN" weightage="20" keywordseo="PayTM">Paytm</keyword> wallet has been moved to the <keyword id="2324069" type="UNKNOWN" weightage="20" keywordseo="Payments-Bank">payments bank</keyword>. Now, your Paytm wallet will operate under the Paytm Payments Bank and will continue to work in the manner as earlier and your login details will remain the same. <keyword id="198636" type="PERSON" weightage="20" keywordseo="Vijay-Shekhar-Sharma">Vijay Shekhar Sharma</keyword>’s Paytm Payments Bank got approval from the <keyword id="6354335" type="CITY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> (RBI) in January this year. Payments banks is a new model of banks conceptualised by the RBI and can accept a restricted deposit, which is currently limited to Rs 1 lakh per customer and may be increased further. These banks cannot issue loans and credit cards. Under the Paytm Payments Bank, which is dubbed as India’s first bank with zero charges on online transactions, will have zero minimum balance requirement and issue free virtual debit card. Paytm became a household name after demonetisation as many Indians moved to the digital wallet and made maximum transactions. Now that the digital wallet has become a payments bank, here’s everything you should know

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Vijay Shekhar Sharma: The controversies of the architect of fintech

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Paytm app will continue to work beyond Feb 29 as usual: CEO Vijay Shekhar Sharma

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Reserve Bank asks NPCI to help continue operations of Paytm app

PTI

RBI pauses onboarding of online merchants by Paytm Payments Services; firm says no material impact on biz

PTI

RBI stops Paytm Payments Bank from opening new accounts

PTI

Paytm Payments Bank becomes operational from today; 10 things you must know

Akanksha Jain

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