SBI chairman Dinesh Khara exclusive statement on Paytm

On January 31, the Reserve Bank of India (RBI) imposed strict restrictions on Paytm Payments Bank, directing it to halt all banking operations by the end of February. This measure was prompted by an audit report revealing persistent non-compliances and significant supervisory concerns within the bank.

Simultaneously, the RBI implemented substantial restrictions, preventing Paytm Payments Bank from accepting new deposits and engaging in credit transactions after February 29. Subsequently, on March 11, the RBI issued a directive, prohibiting the payments bank from onboarding new customers.

Also read: RBI Implements Strict Measures on Paytm Payments Bank: Deposits Halted, Business Suspended, and Customer Onboarding Banned Starting February 29, 2024

In response to the RBI’s directive, Vijay Shekhar Sharma, the founder and CEO of Paytm, announced on February 1 that the company is actively engaging in discussions with its banking partners to facilitate the smooth transfer of Paytm Payments Bank’s business. This underscores Paytm’s commitment to navigating regulatory challenges and ensuring uninterrupted financial services.

Also read: Vijay Shekhar Sharma Reassures Users: Paytm to Continue Operating Beyond Feb 29

Dinesh Khara clarifications:

SBI chairman Dinesh Khara clarified on Saturday that the State Bank of India (SBI) has not initiated any communication with Paytm Payments Bank regarding the transfer of business. During a press conference to announce the bank’s Q3 results,Dinesh Khara stated, “We haven’t made any communication. They are maintaining some accounts with us.” He further emphasized that SBI is reaching out to its merchants, extending an invitation to return and ensuring a seamless payments ecosystem. SBI Payments, offering app-based solutions, QR codes, and point-of-sale terminals, is open to one-time account migrations and actively engaging with businesses.

Vijay Shekhar Sharma reiterated the commitment to collaboration, stating that Paytm is in discussions with several major banks who have offered support. He expressed gratitude for this outreach and mentioned the ongoing discussions to change the Virtual Payment Address (VPA) as part of partnering with other banks. The decision on the shift in partner banks is anticipated in the coming weeks.

In specific terms, the RBI imposed restrictions on Paytm Payments Bank Limited, an affiliate of One 97 Communications Limited, prohibiting it from accepting additional deposits, engaging in credit transactions, or facilitating top-ups after February 29. However, the bank retains the ability to credit interest, cashbacks, or refunds into these accounts, allowing customers to withdraw or utilize their balances without constraints.

To reassure users, Paytm CEO Vijay Shekhar Sharma affirmed that the Paytm app will continue seamlessly beyond February 29. Expressing gratitude for users’ unwavering support, he emphasized the dedication to serving the nation in compliance with regulations. Sharma acknowledged the support from major banks and mentioned the ongoing discussions about changing the VPA as part of collaborating with other banks.

Furthermore, the RBI directed the prompt termination of the Nodal Accounts belonging to One97 Communications Ltd and Paytm Payments Services Ltd. by February 29, 2024. Additionally, the central bank instructed the payments bank to settle all pending transactions and nodal accounts by March 15, with no further transactions permitted thereafter.