Paytm CEO On Focusing On Compliance First and Not Technology Vijay Shekhar Sharma, Founder and CEO of One97 Communications, the parent firm of fintech major Paytm, says the company will focus on compliance as a primary approach, ahead of technology as it works to navigate its business model post the central bank's restrictions.
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Vijay Shekhar Sharma, Founder and CEO of One97 Communications, the parent firm of fintech major Paytm, says the company will focus on compliance as a primary approach, ahead of technology as it works to navigate its business model post the central bank's restrictions. "The important thing for us to remember is that if we do not make compliance and risk a core part of the business then it does not become the bigger business that we envision. As far as the group and entity is concerned, we now look at compliance first, technology second approach," Sharma said.
Sharma was interacting with analysts on Thursday evening following the Reserve Bank of India's (RBI) decision to bar Paytm Payments Bank from accepting fresh deposits and carrying out transactions from February 29 this year. He was replying to a question on how the company manages compliance and governance at One97 Communications. Paytm's stock hit the lower circuit as its share price plummeted 20 per cent to Rs 609 per share on the Bombay Stock Exchange (BSE) within minutes of the stock market's opening bell. The regulator had cited "persistent non-compliance" and "material supervisory concerns". The RBI said no further deposits or credit transactions or top-ups will be allowed in customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Card (NCMC) cards, etc., after February 29, 2024, other than any interest, cashback, or refunds that may be credited at any time.
On the immediate action plans, Sharma added that Paytm will work in partnership with other banks in the future and not Paytm Payments Bank. "Going forward, the keyword is that we will not work with Paytm Payments Bank and that means we will work with other banks. Overall, I can say that it is more of a big speed bump but we believe that with the partnership of other banks and capabilities that are already developed, we will be able to see it through in the next few days or quarters," he elucidated. In an exchange filing, Paytm said it expects an impact on its annual EBITDA (earnings before interest, taxes, depreciation, and amortisation) in the range between Rs 300 and Rs 500 crore following the central bank's order.