Hours after the Reserve Bank of India (RBI) imposed several sanctions on Paytm Payments Bank, OCL (One 97 Communications Limited), announcing a ban on transactions from the bank starting February 29, the company said it will expand its existing relationships with leading third-party banks to distribute payments and financial services products.
The company said that it will “accelerate the plans and completely move to other bank partners,” and it will work only with other banks, and not with Paytm Payments Bank Limited.
“The next phase of OCL’s journey is to continue to expand its payments and financial services business, only in partnerships with other banks,” it said in a BSE filing.
What will work on PaytmSince: the ban does not impact user deposits in their savings accounts, wallets, FASTags, and NCMC accounts, they can continue using these services with the existing balances. The company’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.
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, it said.
For affected services, Paytm Payments Services Limited (PPSL) will move the nodal to other banks during the period of January 31 and February 29. The company also clarified that the founder 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,” the company noted.
The company says it expects the action to have a worst case impact of Rs 300 to 500 crores on its annual EBITDA going forward.
