Explainer: All you want to know about Paytm crisis

What does the the PayTm crisis mean for the financial world, especially for the fintech companies trying to find their feet in India? An in-depth explainer from the Processor.

Processor Intelligence Unit
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Top executives at Paytm are in a huddle with senior leaders from One 97 Communications and Paytm Payment Bank Ltd (PPBL) to strategize their future direction. 

At the other extreme are recruiters having been flooded with resumes and job applications from employees from Paytm Payments Bank and its parent firm One 97 Communications.

According to a Mint report on Monday, the employees of the digital payments company see “more regulatory trouble” in store for the firm.

Meanwhile, there is a “no layoffs” assurance from the firm boss. 

But  why are we talking in extreme terms when it comes to Paytm? 

We will explain the whole gamut of crises surrounding the Paytm saga that has had the business minders, fintech authorities as well as the startups in knots: 


Following “falsified compliances”, the Reserve Bank of India (RBI) last week barred the PPBL from accepting deposits or top-ups in any customer account, wallets or FASTags after February 29. 

The RBI action was a fallout of the KYC anomalies as well as related-party transactions. 


Paytm founder Vijay Shekhar Sharma has reassured that the company will continue its operations beyond February 29, dispelling any concerns about a potential shutdown. 

During a virtual town hall meeting, Sharma offered reassurance to the company's employees, assuring them that there would be no layoffs despite the recent crisis.

In a call lasting about an hour with approximately 800-900 employees, Sharma expressed uncertainty about the situation. 

However, he assured them that the company is actively collaborating with the RBI to comprehend and resolve the issues at hand. 

An India Today report quoted Sharma as emphasizing the significance of employees as integral members of the Paytm family and urged them not to worry amid the ongoing challenges.


Paytm's wallet business might be the initial casualty of the stringent ban imposed by the RBI on January 31.

The company — that employs 35,000 people — is reportedly engaged in exploratory discussions with potential investors regarding the sale of its wallets business, media reports said on Monday, with HDFC Bank and Jio Financial Services said to be among the forerunners to acquire the same. 

According to an ET report: Cross-functional teams have been set up to build the backend architecture to support the transition from the payments bank to other banks.

It adds: Paytm is "talking to Yes Bank, Axis Bank, and HDFC Bank to move the settlements business for Unified Payments Interface-based transactions".

Paytm is currently engaged in discussions regarding the potential migration of payments and settlements away from Paytm Payments Bank.

Paytm faces the risk of losing its Payments Bank license.

Brokerage firms are cautioning about a potential "regulatory overhang" concerning Paytm's future, reports say.