Paytm founder Vijay Shekhar Sharma on Tuesday met Finance Minister Nirmala Sitharaman and explained his position, sources told businessline.

“It was a courtesy call which lasted for nearly 10 minutes. Sharma explained his position. Then he was asked to go to the RBI and sort out the matter,” one of sources said. However, he refused to give details about what Sharma offered in his clarification. Sharma is the part-time Chairman of Paytm Payments Bank, which is facing crisis after RBI restriction on its activities from next month.

The RBI said that Paytm Payments Bank will not be allowed to take further deposits, credit transactions or top-ups in customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., after February 29. However, interest, cashbacks, or refunds may be credited anytime. It also said the Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated as soon as February 29.

Further, settlement of all pipeline transactions and nodal accounts (in respect to all transactions initiated on or before February 29) shall be completed by March 15, 2024 and no further transactions shall be permitted thereafter.

“The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” RBI said while giving reasons for its action. However, it clarified that withdrawal or utilisation of balances by its customers from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., are to be permitted without any restrictions, up to their available balance.

In March 2022, the central bank directed Paytm Payments Bank to stop, with immediate effect, the onboarding of new customers. The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Onboarding of the new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by the RBI after reviewing the report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank.” It said.

Meanwhile, Sharma has repeatedly said that there would be no impact on the Paytm app, and it would continue to provide services as usual. ”Your favourite app is working, will keep working beyond February 29 as usual. He has also assured no layoff.