What happened to Paytm is unfortunate, HDFC Bank harnessing its tech with tie-ups, says Sashi Jagdishan

The regulatory action barring Paytm from operating most of its payments bank business was unfortunate, said HDFC Bank's Managing Director and CEO Sashidhar Jagdishan, referring to the January 31 Reserve Bank of India decision to impose restrictions on Paytm Payments Bank.

However, he acknowledged that Paytm has a robust technology platform, which HDFC Bank is leveraging through a partnership. Jagdishan was speaking at an investor conference hosted by Goldman Sachs on February 19.

Last month, the banking regulator barred Paytm Payments Bank from accepting fresh deposits, and topping up Paytm wallet from February 29. The central bank then extended the deadline to March 15. Paytm also partnered with Axis Bank and shifted their nodal account to the bank to ensure merchants can continue using Paytm’s QR codes and sound boxes.

Paytm and HDFC Bank recently partnered to provide FASTag for new users applying through the Paytm app after the regulatory crackdown by the Reserve Bank of India (RBI) on Paytm Payments Bank. “FAStag is something that they had a reasonable market share. Now, that may get distributed among a lot of other people,” Jagdishan said.
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When asked about whether HDFC Bank and Paytm partnership opens up more opportunities, Jagdishan said, “We are far more sanguine on what we want to acquire, even on the merchant side.” India’s largest private sector bank would continue to do such experiments as long as they are in compliance with the regulatory norms, he added.