Without the RBI’s approval, Paytm struggles to move its payments bank accounts to other banks.

Paytm founder Vijay Shekhar Sharma | AFP/Reuters

The RBI has refused to intervene in the payment firm’s business discussions with banks, derailing Paytm’s plans to transfer Paytm Payments Bank Ltd (PPBL) accounts to other banks.

According to sources, the central government informed Paytm founder Vijay Shekhar Sharma that it had no role in the RBI’s actions. The revelation occurred following his meeting with Finance Minister Nirmala Sitharaman on Tuesday.

One97 Communications, the parent company of Paytm, may lose its payments bank business by the end of this month if the Reserve Bank of India does not grant them any concessions.

During a meeting with Sharma and RBI officials, the central bank refused to assist PPBL in migrating accounts to other banks or extending the February 29 deadline, according to sources.

Sharma was told that PPBL must speak with banks and the National Payments Corporation of India (NPCI), which runs the popular mobile payments network Unified Payments Interface (UPI), on its own, and that the RBI will not pressure banks to do so,” one source told the publication.

Many banks are hesitant to accept PPBL customers after the RBI noted vulnerabilities such as KYC non-compliance and utilising a single PAN card for many accounts.

Earlier reports said that HDFC Bank is in negotiations with its longtime partner Paytm. Parag Rao, HDFC Bank’s country head for payments, stated that the bank is in “wait and watch” mode.

“Paytm has been a long-standing partner in our acceptance and aggregator businesses. Under the current conditions, we don’t know much about what’s going on, but we’re talking and waiting to see how things unfold. “That’s all I can say right now,” Rao told PTI.

Paytm shares opened at Rs 461.30 on Wednesday and are trading at Rs 492.45, up 8.05 percent in early session.

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