Paytm crisis deepens: Payments bank makes major decision to halt service

The situation at Paytm does not seem to be getting better. Now fintech company Paytm has taken a big step amid the ongoing crisis. Paytm's parent company, One97 Communications, has increased its distance from Paytm Payments Bank. The inter-company agreement has been terminated.

The company said the payments bank agreed to simplify the shareholders' agreement to support its governance (of Paytm Payments Bank), independent of its shareholders. Paytm CEO Vijay Shekhar Sharma holds a 51% stake in Paytm Payments Bank, while Paytm owns the remaining stake.

Vijay Shekhar shared the update

Paytm founder Vijay Shekhar Sharma gave this information in an update on social media platform X on Friday morning. He said: Shareholders of Paytm and PPBL (Paytm Payments Bank Limited) have agreed to discontinue various inter-company agreements. 

The Reserve Bank of India took action against Paytm Payments Bank on January 31, 2024. In this, the RBI directed that Paytm Payments Bank should now stop its service. RBI had earlier fixed the date as February 29, 2024, which was later extended to March 15. Paytm says that several measures are being taken to separate the operations of Paytm Payments Bank Limited.

Impact of action on services

Many services have been affected after the RBI action on Paytm. The RBI has banned many services from Paytm Payments Bank. Apart from this, it has been implemented on many services, like Paytm Fastag. After March 15, it will not be possible to add money to the Paytm wallet or recharge Fastag. Customers will not be able to credit money into their accounts opened at Paytm Payments Bank after March 15. However, even after March 15, money can be withdrawn from the Paytm Payments Bank account.