One 97 Communications (OCL) will work with banks, other than Paytm Payments Bank; OCL and Paytm Payments Services Limited (PPSL) will move the nodal to other banks by February 29, 2024.
FinTech BizNews Service
Mumbai, February 4, 2024: One97 Communications Ltd (OCL / Paytm) has categorically denied any investigation by the Enforcement Directorate on itself (OCL), its associates and/or its Founder & CEO for anti-money laundering activities. One97 Communications Ltd (OCL), has made an exchange Disclosure titled "One97 Communications Ltd (OCL)’s response on recent speculative media reports".
The filling read as follows:
To address the recent misinformation, factual inaccuracies and speculation, One97 Communications Limited (OCL / Paytm / Company) would like to set out the Company’s position and directly address rumors in the recent misleading media reports about the Company and its associate, Paytm Payments Bank Limited (PPBL / Bank). This filing is done in the interest of transparency, and protecting our reputation, customers, shareholders and stakeholders from being influenced by unwarranted and speculative stories. We will continue to post such clarifications, as required.
Neither the Company nor its founder and CEO are being investigated by the Enforcement Directorate regarding inter alia money laundering. In the past, certain merchants/ users on our platforms have been subject to enquiries and on those occasions, we have always cooperated with the authorities. During any such investigations by the authorities on any set of merchants/users in the past, we have cooperated with them on these investigations. This has been previously disclosed to the stock exchanges. We would like to set the record straight and deny any involvement in anti-money laundering activities. We have and continue to abide by Indian laws and take regulatory orders with utmost seriousness.
Speculation, Misinformation
There are other stories in various media, including social media, which are spreading speculation and misinformation on the reasons for RBI action on Paytm Payments Bank. The recent direction from RBI is a part of the ongoing supervisory engagement and compliance process. For this action, we refer our stakeholders to the official press release of RBI dated January 31, 2024 and not rely on unofficial sources. We are exploring all options to ensure that our stakeholders are protected from unwarranted and speculative stories."
https://nsearchives.nseindia.com/corporate/PAYTM_04022024210126_Reg30.pdf
'PPBL Is Taking Immediate Steps To Comply With RBI Directions'
One 97 Communications (OCL), the parent of Paytm, has recently issued a number of statements and clarifications, which are as under:
One 97 Communications (OCL) would like to update that it has been informed by its associate, Paytm Payments Bank Limited (“PPBL”), that the Reserve Bank of India (“RBI”) vide its Press Release dated January 31, 2024, has given it further directions under section 35A of the Banking Regulation Act, 1949. PPBL is taking immediate steps to comply with RBI directions, including working with the regulator to address their concerns as quickly as possible. The Company has been informed that this does not impact user deposits in their savings accounts, Wallets, FASTags, and NCMC accounts, where they can continue to use the existing balances.
OCL Working With Various Banks
OCL, as a payments company, works with various banks (not just Paytm Payments Bank), on various payments products. OCL started to work with other banks since starting of the embargo. We now will accelerate the plans and completely move to other bank partners. Going forward, OCL will be working only with other banks, and not with Paytm Payments Bank Limited.
Next Phase Of OCL
The next phase of OCL’s journey is to continue to expand its payments and financial services business, only in partnerships with other banks. We offer acquiring services to merchants in partnership with several leading banks in the country and will continue to expand third-party bank partnerships. The Paytm Payment Gateway business (online merchants) will continue to offer payment solutions to its existing merchants. OCL’s offline merchant payment network offerings like Paytm QR, Paytm Soundbox, Paytm Card Machine, will continue as usual, where it can onboard new offline merchants as well.
Nodal Account Of OCL And Paytm Payments Services
With regard to the direction on termination of nodal account of OCL and Paytm Payments Services Limited (PPSL) by February 29, 2024, OCL and PPSL will move the nodal to other banks during this period. OCL will pursue partnerships with various other banks, to offer various payment products to its customers. OCL’s other financial services such as loan distribution, insurance distribution and equity broking, are not in any way related to Paytm Payments Bank Limited and are expected to be unaffected by this direction.
Worst Case Impact Of Rs3 Bn To 5 Bn On OCL’s Annual EBITDA
Depending on the nature of the resolution, the Company expects this action to have a worst case impact of Rs300 to 500 crores on its annual EBITDA going forward. However, the Company expects to continue on its trajectory to improve its profitability.
Separately, in response to market rumours, our founder has reconfirmed to us that he has not taken any margin loans, or otherwise pledged any shares that are directly or indirectly owned by him. We would take this opportunity to clarify that as per banking regulations, Paytm Payments Bank Limited is run independently by its management and board. While OCL is allowed to have two board seats on the board of Paytm Payments Bank Limited, as a part of its shareholder agreement, OCL exerts no influence on the operations of Paytm Payments Bank Limited, other than as a minority board member, and minority shareholder.
