Paytm Payments Bank Ltd (PPBL) is facing a dispute with auditor JC Bhalla & Co concerning the certification of its fiscal year 2024 accounts, as reported by the Economic Times.
Regulatory restrictions have severely impacted PPBL’s operations, prompting concerns from the auditor about the bank’s ongoing viability. The auditor’s doubts center on whether PPBL can continue as a ‘going concern’, given its operational challenges.
PPBL has countered the auditor’s concerns, asserting that the strength of the Paytm brand will facilitate a revival, backed by planned capital infusion.
Owned 49% by One97 Communications and 51% by founder Vijay Shekhar Sharma, PPBL fears the auditor’s qualifications could hinder its efforts to secure a payment aggregator license for Paytm Payments Services Ltd.
Efforts are underway to convince auditors with management representations or legal opinions affirming the bank’s viability, with senior management seeking intervention from the Reserve Bank of India (RBI). However, RBI intervention is pending the annual report filing, as the dispute remains between management and auditors.
PPBL remains barred from mobilizing deposits or onboarding new customers since March 15, following RBI restrictions due to non-compliance with KYC guidelines. The bank’s net worth has dwindled, generating no income since the ban, signaling uncertain prospects for recovery in the near term.
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