Paytm Set to Resume Lending Platform in March, Addresses RBI Concerns

26 Feb 2024 , 03:25 PM

One97 Communication Ltd, the owner of the Paytm brand, is expected to resume its lending platform provider operations for digital loans in the first week of March, as per sources. Paytm’s lending platform provider business is distinct from Paytm Payments Bank Limited’s (PPBL) operations.

The platform serves as a facilitator for NBFCs and banks like Shriram Finance, Aditya Birla Capital, Poonawalla Fincorp, HDFC Bank, and SBI Cards, allowing them to offer personal loans and credit cards to their customers.

Paytm paused its lending platform operations on February 1 for a few weeks after lending partners sought clarification on RBI’s strictures.

RBI had imposed business restrictions on PPBL, including a ban on fresh deposits and credit transactions after February 29, extending the deadline to March 15 on February 16.

Paytm has been in talks with its 11 lending partners to address their concerns, stating that each lender has specific concerns, and they are actively engaging to provide clarity.

The pause in operations is partly due to around 60,000 merchants using PPBL as their settlement account for loan repayments. The process involves moving the repayment account to other banks and setting up auto-payment mandates digitally.

On January 31, RBI imposed business restrictions on PPBL, citing persistent non-compliance and supervisory concerns. PPBL is barred from accepting new deposits, top-ups, or conducting credit transactions after February 29, with exceptions for interest, cashbacks, or refunds.

Some banks, like Bank of India and YES Bank, are exploring opportunities in QR codes and Soundbox business, as clarified by RBI FAQs on the PPBL issue, requiring merchants to obtain fresh QR codes linked to accounts with different banks or wallets before March 15 to continue receiving payments.

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