Paytm announced on Friday that its payments bank business has accepted the termination of a number of inter-company agreements. Paytm arranges agreements and implements policies for users and retailers.
One97 Communications, the parent company of Paytm, stated that it has decided to terminate inter-company agreements with its Paytm Payment Bank subsidiary.
Paytm Payments Bank Limited (PPBL), the business's associate entity, has received clearance from the Paytm board to discontinue certain inter-company agreements. The company notified stock exchanges on March 1.
Due to continuous violations and ongoing important supervisory concerns, Paytm ran into issues after the RBI clamped down on the Paytm Payments Bank.
The RBI took regulatory action against PPBL, prohibiting it from taking new deposits or top-ups in client accounts, wallets, FASTags, and other instruments after February 29. Later, the deadline was moved to March 15.
Paytm declared earlier in the year, that it would collaborate with other banks and take steps to guarantee that its merchants and customers would receive uninterrupted services.
What is Paytm Payments Bank?
One97 Communications, the company that owns the Paytm brand, directly and through its PPBL subsidiary, owns 49% of the paid-up share capital.
In addition to other services, Paytm Payments Bank provided, which included current and savings accounts, fixed deposits with partner banks, wallet balances, UPI, and FASTag.
Why Paytm Payment Bank Banned?
Because of "ongoing violations and continuing serious supervisory concerns within the bank," the Reserve Bank of India (RBI) recently announced the financial collapse of Paytm Payments Bank. The Paytm Payments Bank was subject to restrictions by the RBI on January 31, claiming a protracted history of failure to comply.
The announcement comes in the context of RBI's continued regulatory action against Paytm Payments Bank, based on allegations of non-compliance.
Among them are irregularities concerning KYC and agreements. Prior to this, Paytm declared that it will form new alliances with other banks and take steps to ensure that both its merchants and consumers would receive seamless services.
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