In a meeting held with Reserve Bank of India officials, Vijay Shekar Sharma, founder and managing director and CEO of One97 Communications Limited and the part-time chairman of Paytm Payments Bank, is said to have sought for some timeline extensions in shutting down the operations of the bank.
According to sources, Sharma and his team of senior executives from the payments bank have requested that the February 29 deadline for halting the bank’s operations be extended by a month. According to sources, this request has been made to finance Minister Nirmala Sitharaman as well, citing reasons such as ensuring continuity of business for merchant and retail customers of Paytm Payments Bank and One97 Communications and in the larger interest of the payments ecosystem.
However, this request is unlikely to be entertained by the regulator.
“How can deficiencies that have not been resolved in two years be sorted out if a few more weeks of time should be given,” a senior executive aware of the situation questioned.
Remove the current team
Another senior official with knowledge of the matter added that a likely solution in the interest of end-users is possible only if Sharma and the current dispensation at the payments bank step away and distance themselves from the bank.
“The problem with Paytm Payments Bank is that it has always been unduly influenced and exploited by Sharma, and as long as he is at the helm, no solution can be worked out. Unless the RBI supersedes the board of the bank and brings in a fresh management team, it would be very difficult to consider any extension to the February 29 deadline,” the official added.
Thinning community support
Meanwhile, support for Sharma also seems to be waning out in the start-up and fintech communities. It is gathered from sources that over 100 fintech and start-up founders and leadership members reached out to sign the letter in support of easing the tough restrictions on Paytm to the finance minister and Reserve Bank of India on Tuesday. Only likes of Yashish Dahiya, founder, Policybazaar, Murugavel Janakiraman of Bharat Matrimony, Rajesh Magow of Makemytrip, and Ritesh Malik of Innov 8, among a few others, have signed the letter, and this does not include any major fintechs that were reached out for this reason, suggesting that fintechs are distancing themselves from the issue. With the kind of allegations coming out, we don’t want to be seen supporting wrong practices,” said the founder of a large fintech who didn’t want to be named.