According to sources, Paytm CEO Vijay Shekhar Sharma met Finance Minister Nirmala Sitharaman on February 6. A few days ago, India’s central bank ordered its payments bank to halt operations, sending shares tumbling.

Earlier in the day, news agencies Reuters Reports said Sharma and several Paytm officials met with the Reserve Bank of India on Monday to discuss regulatory issues.

Also Read: Here’s Why RBI Bans Paytm Payments Bank

Last Wednesday, the Reserve Bank of India asked Paytm Payments Bank to stop accepting new deposits in its accounts and popular digital wallets from March, citing regulatory concerns and non-compliance with rules.

“Discussions are ongoing with the Reserve Bank of India and the Finance Ministry to resolve regulatory issues and compliance issues,” a source said. Reuters.

Paytm seeks extension

Sources said the company has sought an extension to the February 29 deadline from the Reserve Bank of India and has been seeking clarification from the central bank on the transfer of licenses for its wallet business and digital highway tolling service Fatag.

“The RBI listened to Paytm but made no commitment,” another source said.

Alipay Stock

Paytm shares have fallen about 42% as of Monday, wiping out $2.5 billion in market capitalization on concerns about the impact on the broader business as Paytm Payments Bank powers much of the functionality of the digital payments app, which competes with apps like Walmart’s PhonePe Program competition and Google.

The stock hit a record low early on Tuesday after Reuters reported that India’s federal anti-fraud agency was investigating whether the platform operated by the company was involved in violations of foreign exchange rules.

A Paytm spokesperson denied any violation of foreign exchange laws, calling the allegations “baseless and inconsistent with the facts”.

A person familiar with the matter said last week that a regulatory crackdown by the Reserve Bank of India could also be a precursor to the cancellation of Paytm’s license.

Paytm shares reversed some losses on Tuesday and closed 2.9% higher at 451.15 rupees, after rising 8% earlier in the day.

wait and watch

HDFC Bank is “in talks” with its long-time partner Paytm as the fintech firm tries to find a way out of the Reserve Bank of India’s current restrictions, a top executive at the largest private sector lender said on Tuesday.

Parag Rao, national payments head at HDFC Bank, stressed that the bank would be in talks with fintech companies even considering its partnerships in the acceptance and aggregation space and said the bank was in a “wait and see” mode.

Rao made it clear that HDFC Bank’s partnership with Paytm is with its parent company One97 Communications and not with Paytm Payments Bank, which is under regulatory scrutiny.

(Information provided by Reuters)