Paytm CEO Advised by Government: No intervention in RBI clampdown

Following the Reserve Bank of India's (RBI) recent restrictions on Paytm, the company's CEO, Vijay Shekhar Sharma, met with Finance Minister Nirmala Sitharaman to discuss the matter.

However, the Finance Ministry confirmed that the government would have no role to play in the RBI's actions.

The meeting with the Finance Minister emphasised that Paytm needs to resolve the issues directly with the RBI and adhere to the regulatory guidelines set by the central bank.

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Paytm has been grappling with regulatory challenges after the RBI directed the company to halt its popular digital wallet, deposits, and credit products.

Paytm's shares experienced a significant dip of over 40 per cent following the RBI's directives.

The market sentiment, however, showed signs of recovery this Tuesday.

While the government made it clear that it would not intervene in the RBI's clampdown, Vijay Shekhar Sharma also held discussions with RBI officials to address the regulatory concerns raised by the central bank.

The RBI's restrictions included barring Paytm Payments Bank Ltd from accepting deposits or facilitating credit transactions after February 29, affecting various customer accounts and prepaid instruments linked to those accounts, such as wallets and FASTags.

The RBI's actions extended to terminating the nodal accounts of Paytm's parent company, One97 Communications Ltd, and Paytm Payments Bank Ltd.

Despite these challenges, Paytm Payments Bank sought to reassure its customers, assuring them that their funds are secure and that they can continue to utilise balances from their accounts without any limits, as specified in the RBI order.

However, after February 29, depositing money into accounts or wallets will no longer be possible.