Paytm was like a daughter who met with an accident and is in ICU now, founder and MD Vijay Shekhar Sharma said on the Paytm crisis
“The company for me is like a daughter…we were getting mature, going towards full profitability, making free cash and so on. I saw it as a daughter on the way for an important entrance test, but met with an accident, and is in ICU right now,” Sharma said from a personal point of view.
Sharma acknowledged the company could have done better and they have learnt the lesson at JIIF Foundation Day event,Delhi.
“At a professional level, I would rather say we should have done better, there is no secret about it. We should have understood better…and we had responsibilities, we should have fulfilled, much better way…we learnt the lesson,” he said.
One 97 Communications, Paytm parent company, reported a fall in revenue to ₹2,399 crore from ₹2,465 crore in Q4 FY23 from the year earlier. Losses widened to ₹551 crore, from ₹168 crore in Q4 FY23 from the previous year, largely due to writing off ₹227 crore on its investment in the Paytm Payments Bank Ltd, in which it holds 49%.
Earlier this year, the Reserve Bank of India had directed Paytm Payments Bank to restrict its operations after 29th February 2024 due to non-compliance issues. The RBI issued this directive due to non-compliance with KYC norms and money laundering concerns by Paytm. RBI banned transactions such as deposit and credit facilities, no top-up on prepaid and post-paid accounts, fast tag recharge, and UPI transactions.
The payments bank had come under the central bank’s scrutiny for the first time in 2018 when RBI halted the opening of new accounts due to licensing violations and non-compliance with KYC norms. In 2021, the payments bank was fined ₹1 crore for submitting false information on money laundering concerns. In 2022, Paytm was banned from acquiring new customers.
Paytm Payments Bank is the banking arm under One97 Communications founded in 2017 by Vijay Shekhar Sharma. The bank had a user base of around 30 crore.
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