What Government Advised Paytm CEO During 10-Min Meeting On RBI Clampdown

The Paytm chief executive was told the government has no role to play in connection with the latest RBI restrictions when he went to meet Finance Minister Nirmala Sitharaman yesterday, said people familiar with the matter.

Vijay Shekhar Sharma is in fire-fighting mode after the Reserve Bank of India last week asked Paytm to stop its popular digital wallet, deposits and credit products.

Paytm shares had tanked over 40% since then, rebounding only this Tuesday.

Mr Sharma's meeting with Ms Sitharaman lasted for 10 minutes and he was told the government has no role to play in this matter, said government sources.

Paytm has been asked to sort out the issue with RBI and comply with their guidelines, they added.

Mr Sharma also met RBI officials yesterday to discuss the regulatory concerns, sources said.

The RBI barred Paytm Payments Bank Ltd last Wednesday (January 31) from accepting deposits or allowing credit transactions, or top-ups, in customer accounts or prepaid instruments - such as wallets and FASTags - linked to those accounts, after February 29. However, customers will be able to utilize balances from their accounts without any limit, the RBI order said.

The RBI has also terminated the nodal accounts of Paytm's parent company, One97 Communications Ltd, and Paytm Payments Bank Ltd.

Paytm Payments Bank has assured its customers that their money is "safe", but they won't be able to deposit money in their accounts or wallets after February 29. But the app will keep working beyond that as usual, Mr Sharma has said.