Who Is Vying For Businesses Of Paytm Payments Bank? — NDTV Profit Exclusive

"On Feb. 16, as Paytm users were soaking in details from the Reserve Bank of India's FAQs, an announcement from the company stunned everyone. One97 Communications Ltd.-operated Paytm shifted its nodal account to Axis Bank Ltd. by opening an escrow account.With this, the Paytm QR, soundbox and card machines continue to work even beyond March 15, the extended deadline by the RBI for Paytm Payments Bank restrictions, the company said.While the announcement confirmed speculations of big banks stepping up to acquire Paytm’s businesses, it also raised questions on who is vying for what.Bankers that NDTV Profit spoke with said that while negotiations with Paytm are underway for a chunk of FASTags, National Common Mobility Card, and becoming banking partners for UPI transactions-related businesses, deals are yet to be finalised.'The basic risk in this opportunity would be the KYC of merchants or client onboarding. If banks take any business, they'll have to re-do KYC because nobody wants to get on the wrong side of the regulator,' according to Kuntal Sur, partner–risk consulting and leader for financial services and treasury risk management at PwC India.Queries mailed on Tuesday to Shriram Finance Ltd., HDFC Bank Ltd., IDBI Bank Ltd., State Bank of India, IDFC First Bank Ltd., Axis Bank, Yes Bank Ltd. and Kotak Mahindra Bank Ltd. were not immediately responded to. Queries mailed to Paytm and Paytm Payments Bank on Wednesday were also not immediately responded to..RBI FAQs For Paytm Payments Bank Customers.Paytm is looking to have three banks as a banking partner for smooth UPI services, according to two people with knowledge of the matter, who spoke on condition of anonymity. For this, Yes Bank, Axis Bank and HDFC Bank are the top picks.The conversations with Yes Bank have completed four rounds, and a final decision is expected before March, the first of the two people mentioned above said. If it sails through, the virtual payment address of @paytm would change, and the technology cost incurred would be borne by Paytm, the person said.For Paytm’s FASTag business, most banks are looking at becoming acquirers, according to three people with knowledge of the matter.The redistribution of this will be driven by Indian Highways Management Co., the first of the three people quoted above said. For this, IHMCL has also divided 248 toll plazas among nine banks and these include HDFC Bank, Yes Bank, IDBI Bank, IDFC First Bank, Kotak Mahindra Bank and others.Recently, the National Highways Authority of India dropped Paytm Payments Bank from the list of authorised banks for FASTag services due to RBI’s action.There is also room to acquire the National Common Mobility Card business. For this, negotiations are at an advanced stage with the State Bank of India, but a consensus is yet to be reached, the person said..Paytm Payments Bank Loses NHAI Authorisation For Issuing FASTags.As banks continue their discussions with Paytm, non-bank lenders, which had partnerships with Paytm, are adopting a wait-and-watch approach, according to two people with knowledge of the matter. They are also focusing on tweaking their strategies.Shriram Finance, for instance, is awaiting clarity from Paytm on when the lending business will resume. The company may reach out to Axis Bank soon to get some clarity on the situation, the second of the two people quoted above said on the condition of anonymity.In an analyst call on Feb. 1, the company announced a temporary halt to originating new loans until operational issues were resolved.Poonwalla Fincorp, too, would follow its credit policy and principles while having companies like Paytm as digital direct selling agents, the third of the three person quoted earlier said on the condition of anonymity. If the digital DSA fits into the company’s norms, it would continue working with them.Bernstein, in a Feb. 16 report, said that RBI’s actions are not intended to disrupt UPI payments or other functions of Paytm. They are limited to the Paytm Payments Bank.'RBI hinted at merchants being able to use a Paytm QR code/Soundbox or POS terminal as long as it's linked to a non-PPBL bank account,' the report said.Jefferies, however, moved Paytm to 'not rated' till the news flow settled. 'RBI's FAQs reiterate the wind-up of PPBL's business (deposit A/Cs, wallets, etc.), but platforms outside PPBL (Patym app, UPI transfers, merchant payment and loan originations) can continue,' it said.Accordingly, the brokerage firm expects a 28% YoY decline in FY25E revenue that would push Paytm into cash burn..Paytm Moved To 'Not Rated' By Jefferies Till 'News Flow Settles'"

Who Is Vying For Businesses Of Paytm Payments Bank? — NDTV Profit Exclusive

The announcement that Paytm is shifting its nodal account to Axis Bank confirmed speculation of big banks stepping up to acquire Paytm’s businesses. It also raised questions on who is vying for what.

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Who Is Vying For Businesses Of Paytm Payments Bank? — NDTV Profit Exclusive

The announcement that Paytm is shifting its nodal account to Axis Bank confirmed speculation of big banks stepping up to acquire Paytm’s businesses. It also raised questions on who is vying for what.

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