India’s fintech star Paytm totters after being hauled up for lapses

Its banking unit has been asked to end its services due to non-compliances

- Debarshi Dasgupta

The day after demonetisation the infamous moment on Nov 8, 2016, when the Indian government suddenly pulled highvalue notes out of circulation - Indians woke up to a full-page cover advertisement in their newspapers.

In it, Paytm, an emerging financial technology brand then, congratulated Prime Minister Narendra Modi on taking the "boldest decision in the financial history of independent India".

Paytm unleashed more ads in the following days, telling harried Indians controversially "drama bandh karo, Paytm karo (stop the drama, use Paytm)".

That early fillip from demonetisation is something the homegrown digital payment platform exploited fully to send its fortune soaring.

Paytm's gross merchandise value - the total financial volume of the sales of its goods - jumped from 2.3 trillion rupees (S$37.4 billion) in financial year 2019 to 13.2 trillion rupees in financial year 2023.

But today, the Indian fintech poster boy is on shaky ground, with some even suggesting it could be taken over by another company to ensure its survival.

India's central bank, the Reserve Bank of India (RBI), has asked Paytm's banking division - Paytm Payments Bank (PPB) - to stop onboarding new customers and end its services due to "persistent" non-compliances.

Customers cannot top up or receive deposits into PPB accounts and wallets after March 15, though they can use the money in them till it runs out.

PPB has more than 30 million accounts, including those of vendors who accept payments using Paytm's QR code stickers and point-of-sale terminals.