\n\u00a0<\/p>\n
\n\tBefore regulatory action against the payments bank in 2024, Sharma had explored transitioning the entity into a small finance bank, which would have allowed Paytm to expand beyond payments into lending and deposit-taking. That option is no longer available.<\/p>\n
\u00a0<\/p>\n
\n\tThe cancellation of Paytm Payments Bank\u2019s licence last week also ends the structure under which One97 Communications operated its digital wallet business through the bank.<\/p>\n
\u00a0<\/p>\n
\n\tThe company could still reapply for a prepaid payment instrument (PPI) licence to revive the wallet business, said industry sources. However, growth prospects for wallets have narrowed amid increased competition, limited monetisation opportunities and the wider adoption of alternatives such as UPI Lite.<\/p>\n
\u00a0<\/p>\n
\n\tThe company said on Saturday it would voluntarily wind down Paytm Payments Bank and added that the licence cancellation is unlikely to have a material impact because its current operations function independently of the bank. Paytm\u2019s wallet business was operated through Paytm Payments Bank, which issued the PPIs linked to the service.<\/p>\n
\u00a0<\/p>\n
\n\tThe company did not respond to an email seeking comment on the matter.<\/p>\n
\u00a0<\/p>\n
\n\tWallet business in focus<\/p>\n
\u00a0<\/p>\n
\n\tOne97 Communications, the Noida-based operator of the Paytm brand, had been awaiting clarity on the regulatory restrictions imposed on the payments bank before restarting wallet operations, while also considering plans to move the wallet business \u201cback home\u201d.<\/p>\n
\u00a0<\/p>\n
\n\tDuring the third quarter of 2024-25, Sharma said any decision on the wallet business would depend on the final regulatory outcome for the payments bank. \u201cWe want to do it. We are waiting for Paytm Bank\u2019s final outcome and on the basis of that we’ll take the next step,\u201d he said at the time.<\/p>\n
\u00a0<\/p>\n
\n\tAccording to the payments bank\u2019s annual report, it had 38 million full-KYC wallets and more than 87 million outstanding wallets as of FY25, with balances totalling \u20b9998.4 crore.<\/p>\n
\u00a0<\/p>\n
\n\tThe bank faced regulatory restrictions in early 2024, which led to the suspension of most operations, including deposits and credit transactions. Customers could no longer add money to wallets, although they were able to withdraw existing balances, limiting usage over the past two years.<\/p>\n
\u00a0<\/p>\n
\n\tLimited growth in wallets<\/p>\n
\u00a0<\/p>\n
\n\tBy the third quarter of 2025-26, Sharma described reviving the wallet business as a \u201cpromise to bring the wallet back home.\u201d At the same time, management indicated that wallets were unlikely to remain a significant growth driver for the industry.<\/p>\n
\u00a0<\/p>\n
\n\t\u201cWe had talked about wallet profitability being \u20b9500 crore in January 2024. We don\u2019t think the product is that big in the industry going forward. So we want to bring it for consumer completeness because the consumer should have an option,\u201d Madhur Deora, president and group chief financial officer of Paytm, told analysts after the company\u2019s Q3FY26 earnings.<\/p>\n
\u00a0<\/p>\n
\n\tDeora added that wallets were no longer as central to the business as they had been in earlier years. \u201cWe are big believers that consumers should have options, as many options as we can come up with. So postpaid is an option, wallet is an option, but one shouldn\u2019t think of wallet as being as sticky, as relevant, as important today as it was three years ago,\u201d he said.<\/p>\n
\u00a0<\/p>\n
\n\tAn industry source said that while use-case-specific PPIs for categories such as gifting, meal benefits and transit payments continue to see adoption, wallet-based PPIs have lost ground as real-time payments through the UPI become more widely used. \u201cPaytm can apply for the PPI licence but it will also have to understand what kind of play it wants to have in the market. E-wallets are not as popular as they used to be before,\u201d the person said.<\/p>\n
\u00a0<\/p>\n
\n\tAs of March 2026, Paytm Payments Bank had 100.73 million outstanding PPI wallets, according to Reserve Bank of India data. Of these, 6.8 million were active. In January 2024, the bank had 630.7 million outstanding wallets.<\/p>\n
\u00a0<\/p>\n
\n\tNo immediate financial impact<\/p>\n
\u00a0<\/p>\n
\n\tBrokerage firm Emkay Global Financial Services said the cancellation of the associate entity\u2019s licence would not have a direct financial impact on Paytm, though it noted that the language used in the RBI\u2019s communication could create reputational concerns. \u201cWe believe the RBI\u2019s citing management conduct \u2018prejudicial to the interest of depositors as also the public interest\u2019 and concluding that \u2018no useful purpose or public interest would be served by continuation\u2019 is severe. While Paytm is legally ring-fenced, the tone of the order creates perception risk, in our view,\u201d the brokerage said.<\/p>\n
\u00a0<\/p>\n
\n\tThe RBI had approved a payment aggregator licence for Paytm in 2025, indicating that the regulator was satisfied with the compliance posture of the listed entity.<\/p>\n","protected":false},"excerpt":{"rendered":"\u00a0
Before regulatory action against the payments bank in 2024, Sharma had explored transitioning the entity into…\n","protected":false},"author":2,"featured_media":399607,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[206342,206346,206341,342,111,139,69,206338,206345,206335,206344,206337,206336,206343,145,206339,206340],"class_list":["post-399606","post","type-post","status-publish","format-standard","has-post-thumbnail","category-mobile","tag-digital-payments-india-trends","tag-fintech-compliance-india","tag-madhur-deora-paytm-cfo-comments","tag-mobile","tag-new-zealand","tag-newzealand","tag-nz","tag-one97-communications-wallet-business","tag-payment-aggregator-licence-paytm","tag-paytm-payments-bank-licence-cancelled","tag-paytm-wallet-usage-decline","tag-prepaid-payment-instrument-licence-india","tag-rbi-action-paytm-wallet","tag-rbi-fintech-regulation-india","tag-technology","tag-upi-vs-wallets-india","tag-vijay-shekhar-sharma-paytm-strategy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/399606","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=399606"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/399606\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/399607"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=399606"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=399606"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=399606"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}