Faced with risk of license revocation, administrator to be tasked with handling unclaimed deposits and other matters of the bank, say sources [View in browser]( [See all newsletters]( 04 March 2024 Administrator likely to be appointed at Paytm Payments Bank after March 15 [Paytm] With less than a fortnight to go for Paytm Payments Bank to wind down its operations, highly placed sources in the banking circles say the bank could be the first significant instance in over two decades where the [Reserve Bank of India]( may not hesitate to take a drastic step such as cancellation of its bank license. âIf that be the case, an administrator could be appointed at the bank to oversee certain critical aspects,â said a person with knowledge of the matter. bl exclusive Failed transactions A move of this nature is likely after threeâfour instances of failed due diligence done on Paytm Payments Bank in a bid to take over its business. Being a deposit-taking entity, it is learnt that a few large banks, including a rival payments bank, are interested in Paytmâs wallet business and have shown interest in taking over Paytm Payments Bank. âHowever, with reports of inadequate KYC compliance looming over the bank, the interested parties stepped back,â said a banker aware of the matter. According to a few more sources, the regulator had sounded off the interested entities acquiring Paytm Payments Bank as they would be at their own risk and no dispensation on the compliance front would be extended to them. âThis was a deterrent for any transaction to go through,â said the person quoted above. It may be noted that on February 26, the board of Paytm Payments Bank was reconstituted with new members and [Vijay Shekar Sharma stepped down as the chairman of the bank](. Subsequently, [One97 Communications (OCL)]( terminated all its contracts with the bank. Sharma holds 51 per cent equity in Paytm Payments Bank, while the rest is held by OCL. Next steps Another banker added that, with the RBI explicitly mentioning in the FAQ dated February 16 that no credits can be made to Paytm Payment Bankâs savings account and no fresh deposits with partner banks through Paytm Payments Bank will be allowed after March 15, 2024, indicates that the bank is unlikely to be in existence for long. - Also read: [Paytm board approves discontinuation of inter-company agreements with Paytm Payments Bank]( However, for depositors who may not have withdrawn or closed their accounts with the bank within the slated timelines, their sums will be transferred to âunclaimed depositsâ account under the âDepositor Education and Awarenessâ (DEA) Fund Scheme, 2014. The role of the administrator would be to ensure that any deposit claims made thereafter is satisfactory repaid to the depositors. As of March 31, 2023, Paytm Payments Bank held â¹3,285.27 crore of deposits, with â¹2,955.96 crore of deposits with 1â3 year maturity. License revocation likely Paytm Payments Bank faced with risk of license revocation after March 15
Move likely as talks with 3 â 4 large banks for takeover fail
Inadequate compliance by Paytm Payments Bank seen as reasons for failed takeover talks
RBI may appoint an administrator to oversee unclaimed deposits after March 15
Vijay Shekhar Sharma holds 51 per cent stake in Paytm Payments Bank; rest with One97 Communication However, for depositors who may not have withdrawn or closed their accounts with the bank within the slated timelines, their sums will be transferred to âunclaimed depositsâ account under the âDepositor Education and Awarenessâ (DEA) Fund Scheme, 2014. The role of the administrator would be to ensure that any deposit claims made thereafter is satisfactory repaid to the depositors. As of March 31, 2023, Paytm Payments Bank held â¹3,285.27 crore of deposits, with â¹2,955.96 crore of deposits with 1â3 year maturity. You Might Also Like [Indian government allows derivatives trading in skimmed milk powder, apples, bamboo and 8 other commodities]( [Economy]( [Indian government allows derivatives trading in skimmed milk powder, apples, bamboo and 8 other commodities]( [Tech industry to push back against the new AI rule requiring govt approvals]( [Info-tech]( [Tech industry to push back against the new AI rule requiring govt approvals]( [Council of Ministers brainstorm on action plan for next 5 years; 100-day agenda]( [National]( [Council of Ministers brainstorm on action plan for next 5 years; 100-day agenda]( [Captive, commercial coal mines likely to produce 140 mn tons in FY24 as Govt pushes for higher output]( [Economy]( [Captive, commercial coal mines likely to produce 140 mn tons in FY24 as Govt pushes for higher output]( Stay informed Subscribe to businessline to stay up-to-date with in-depth business news from India [arrow]( Copyright @ 2024, THG PUBLISHING PVT LTD. If you are facing any trouble in viewing this newsletter, please try [here]( Manage your newsletter subscription preferences [here]( If you do not wish to receive such emails go [here](