As banks continue their discussions with Paytm, non-bank lenders, which had partnerships with Paytm, are adopting a wait-and-watch approach, according to two people with knowledge of the matter. They are also focusing on tweaking their strategies.
Shriram Finance, for instance, is awaiting clarity from Paytm on when the lending business will resume. The company may reach out to Axis Bank soon to get some clarity on the situation, the second of the two people quoted above said on the condition of anonymity.
In an analyst call on Feb. 1, the company announced a temporary halt to originating new loans until operational issues were resolved.
Poonwalla Fincorp, too, would follow its credit policy and principles while having companies like Paytm as digital direct selling agents, the third of the three person quoted earlier said on the condition of anonymity. If the digital DSA fits into the company’s norms, it would continue working with them.
Bernstein, in a Feb. 16 report, said that RBI’s actions are not intended to disrupt UPI payments or other functions of Paytm. They are limited to the Paytm Payments Bank.
“RBI hinted at merchants being able to use a Paytm QR code/Soundbox or POS terminal as long as it’s linked to a non-PPBL bank account,” the report said.
Jefferies, however, moved Paytm to ‘not rated’ till the news flow settled. “RBI’s FAQs reiterate the wind-up of PPBL’s business (deposit A/Cs, wallets, etc.), but platforms outside PPBL (Patym app, UPI transfers, merchant payment and loan originations) can continue,” it said.
Accordingly, the brokerage firm expects a 28% YoY decline in FY25E revenue that would push Paytm into cash burn.
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