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Paytm terminates inter-company agreements with payments bank unit

EntrackrEntrackr · 1y ago
Paytm terminates inter-company agreements with payments bank unit
Medial

Paytm has discontinued inter-company agreements between the company and Paytm Payments Bank Limited (PPBL), according to a filing by the parent company, One97 Communications, on the stock exchange. The new measures aim to ensure the independent operations of PPBL, the company added. “Further, the shareholders of PPBL have agreed to simplify the Shareholders Agreement (SHA) to support PPBL’s governance, independent of its shareholders. The Board of OCL approved the termination of agreements and amendment of SHA on March 1, 2024,” One 97 Communications said [pdf]. The company reiterated its commitment to entering into new partnerships with other banks and taking measures to ensure uninterrupted services to its customers and merchants. Earlier this week, Vijay Shekhar Sharma stepped down from his position as part-time non-executive chairman and board member of PPBL. The company also announced the reconstitution of its board of directors and plans to soon appoint a new chairman. The developments come in the wake of the Reserve Bank of India (RBI) imposing a set of business restrictions on Paytm Payments Bank over non-compliance and regulatory concerns. The business restrictions are set to impact Paytm’s business verticals related to the payments bank, though the RBI has granted a few temporary reliefs. Meanwhile, SoftBank has divested its stake worth Rs 580 crore in Paytm. This marks the fifth instance of SoftBank’s disposal of its shares in the company in the ongoing fiscal year. Now, the VC’s stake in Paytm has reduced to nearly 3%. During this disinvestment, SoftBank disposed of its 2.17% stake which contracted its shareholding from 5.01% to 2.83%, according to regulatory filings. SoftBank has already disposed of Rs 3,800 crores of worth shares in the current fiscal year ( May, July, December, and January). The disposal sums up to Rs 4,380 crore (as per the share price on the date of transactions).

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Paytm Payments Bank slapped with Rs 5.49 Cr fine for flouting money laundering norms

EntrackrEntrackr · 1y ago
Paytm Payments Bank slapped with Rs 5.49 Cr fine for flouting money laundering norms
Medial

The Financial Intelligence Unit-India (FIU-IND) has imposed a fine of Rs 5.49 crore on Paytm Payments Bank Ltd over violations of the money laundering regulations, the Ministry of Finance said in a press release on late Friday. “FIU-IND initiated a review of the Paytm Payments Bank Ltd on receipt of specific information from law enforcement agencies in respect of few entities and their network of businesses engaged in a number of illegal acts, including organising and facilitating online gambling,” the release added. “Further, the money generated from these illegal operations, i.e. proceeds of crime were routed and channelled through bank accounts maintained by these entities with the Paytm Payments Bank Ltd.” After considering the written and oral submissions of the PPBL, the FIU-IND found the charges against Paytm were substantiated. Consequently, it imposed a penalty of Rs 5.49 crore under section 13 of PMLA. Paytm Payments Bank spokesperson said, ”The penalty pertains to issues within a business segment that was discontinued two years ago. Following that period, we have enhanced our monitoring systems and reporting mechanisms to the Financial Intelligence Unit (FIU).” This morning, Paytm announced severing inter-company agreements between the company and Paytm Payments Bank Limited. Earlier this week, Vijay Shekhar Sharma stepped down from his position as part-time non-executive chairman and board member of PPBL. The company also announced the reconstitution of its board of directors and plans to soon appoint a new chairman. The developments come in the wake of the Reserve Bank of India (RBI) imposing a set of business restrictions on Paytm Payments Bank over non-compliance and regulatory concerns. The business restrictions are set to impact Paytm’s business verticals related to the payments bank, though the RBI has granted a few temporary reliefs.

Paytm Payments Bank | Latest & Breaking News on Paytm Payments Bank | Photos, Videos, Breaking Stories and Articles on Paytm Payments Bank

Money ControlMoney Control · 1y ago
Paytm Payments Bank | Latest & Breaking News on Paytm Payments Bank | Photos, Videos, Breaking Stories and Articles on Paytm Payments Bank
Medial

Paytm Payments Bank has been in the news lately due to various issues surrounding its license and compliance with regulations. According to the Financial Intelligence Unit, the bank failed to implement a mechanism to detect and report suspicious transactions as required under the PMLA. Speculations over the revoking of Paytm Payments Bank's license have caused its stock to fall. Additionally, the controversy has led to a drop in Paytm's UPI market share. The bank has been fined for violating the PMLA. Despite efforts to cut ties with the bank, Paytm still relies on it in multiple ways. The board of Paytm's parent company has approved the termination of agreements with Paytm Payments Bank. Various financial changes, including restrictions on Paytm Payments Bank accounts, may impact users. Paytm's stock has been in decline and Yes Bank has expressed interest in acquiring the merchant accounts of Paytm Payments Bank. Paytm's efforts to resolve the issues with the regulator are seen as a delay tactic. A Paytm employee committed suicide due to fears of job loss. The board of Paytm Payments Bank has been restructured and the bank has faced various restrictions and an extended deadline for compliance. Despite setbacks, merchant loyalty to Paytm remains intact. Paytm's stock has shown some recovery but Goldman Sachs has reduced its target price. The decline in daily downloads of the Paytm app has been noted, while rival BHIM UPI has seen an increase. Overall, Paytm Payments Bank is facing significant challenges and uncertainties.

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