SBI chairman says no communication with Paytm on transfer of business

"We haven't made any communication. They are maintaining some accounts with us," Dinesh Khara said

Chairman of country’s largest lender, Dinesh Khara on February 3 said the State Bank of India (SBI) has not made any communication with Paytm Payments bank on the transfer of business from the company.

"We haven't made any communication. They are maintaining some accounts with us," said Khara, while speaking at a press conference post the announcement of the bank's quarterly earnings. Furthermore, Khara noted that the bank is reaching out to its merchants.

Earlier,  Paytm founder and chief executive officer Vijay Shekhar Sharma said on February 1 that the fintech major is in discussion with some of its banking partners to transfer the business of Paytm Payments Bank.

Also read: Post RBI action, what happens to your money in Paytm Wallet or Paytm Bank?

“Many large banks have reached out to us offering support and we are overwhelmed. We will have to change our Virtual Payment Address (VPA) as we partner with other banks. The decision to change partner banks will happen in a few weeks. We are in discussion and these are yet to be completed,” Sharma said.

RBI on January 31 imposed major business restrictions on Paytm Payments Bank including accepting fresh deposits and doing credit transactions after February 29. On March 11, the RBI barred Paytm Payments Bank from onboarding new customers.

The central bank said a Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.

No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime, RBI said.

The central bank also asked to terminate the Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. at the earliest, in any case not later than February 29, 2024.

The RBI directed the payments bank to settle all pipeline transaction and nodal accounts by March 15 and no further transaction shall be permitted thereafter.