After RBI sanctions against Paytm Payments Bank, OCL announced that they will expand their relationships with third-party banks; however, they will no longer work with Paytm Payments Bank.
Paytm Payments Services Limited (PPSL) is moving its nodal to other banks. The founder has not pledged any shares. The impact on annual EBITDA is estimated at Rs 300 to 500 crores.
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 stated that it will expand its current partnerships 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 expanding its payments and financial services business, only in partnerships with other banks, it said in a BSE filing.
What will work on Paytm
Since the ban does not impact user deposits in their savings accounts, wallets, FASTags, and NCMC accounts, they can continue using these services with their existing balances. The company’s offline merchant payment network offerings, such as Paytm QR, Paytm Soundbox, and Paytm Card Machine, will continue as usual, and it will be able to 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.
During January 31 and February 29, Paytm Payments Services Limited (PPSL) will relocate the nodal to other banks for affected services. According to the company, the founder has not taken any margin loans or pledged any shares 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 anticipates that the action will have a negative impact on its annual EBITDA of Rs 300 to 500 crores in the future.