Vijay Shekhar Sharma acknowledged that Paytm could have done better and they have learnt the lesson.(Bloomberg)
Vijay Shekhar Sharma, the founder and Managing Director of Paytm, likened the company's recent troubles to a daughter who met with an accident and is now in the ICU. Speaking at the JIIF Foundation Day event in Delhi, Sharma expressed his personal connection to the company and acknowledged that Paytm could have performed better.
"The company for me is like a daughter…we were getting mature, going towards full profitability, making free cash and so on. I saw it as a daughter on the way for an important entrance test, but met with an accident, and is in ICU right now," Sharma said. He admitted that they have learned valuable lessons from the challenges faced.
At a professional level, Sharma conceded that Paytm should have done better, emphasizing the company's responsibility to fulfill its obligations more effectively. "We should have understood better…and we had responsibilities, we should have fulfilled, much better way…we learnt the lesson," he added.
One97 Communications, the parent company of Paytm, reported a decline in revenue to ₹2,399 crore in Q4 FY23, down from ₹2,465 crore the previous year. Additionally, losses widened to ₹551 crore from ₹168 crore in the same period, largely due to writing off ₹227 crore on its investment in Paytm Payments Bank Ltd, in which it holds a 49% stake.
Earlier this year, the Reserve Bank of India (RBI) directed Paytm Payments Bank to restrict its operations after 29th February 2024 due to non-compliance issues. The directive cited non-compliance with KYC norms and money laundering concerns. Consequently, the RBI banned transactions such as deposit and credit facilities, top-ups on prepaid and post-paid accounts, Fastag recharges, and UPI transactions.
Paytm Payments Bank first came under the central bank's scrutiny in 2018 when the RBI halted the opening of new accounts due to licensing violations and non-compliance with KYC norms. In 2021, the bank was fined ₹1 crore for submitting false information on money laundering concerns. In 2022, Paytm was banned from acquiring new customers.
Founded in 2017 by Vijay Shekhar Sharma, Paytm Payments Bank is the banking arm under One97 Communications. The bank had a user base of around 30 crore before these regulatory challenges.
Sharma's heartfelt comparison underscores the significant impact of these setbacks on both a personal and professional level, highlighting the challenges and the lessons learned as Paytm navigates through this turbulent period.
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