India's Paytm Payments Bank to resume taking on new customers

71
2
India's Paytm Payments Bank to resume taking on new customers

MUMBAI: India's Paytm Payments Bank, which facilitates transactions on Paytm's mobile commerce platform, expects the central bank to resume taking on new customers in the next few months, a top executive told Reuters.

In March, the Reserve Bank of India ordered a comprehensive audit of the company's IT systems, citing material supervisory concerns, without elaborating further, and barring it from taking on new customers.

The bank is working with the RBI to complete the IT audit and address the regulator's concerns.

The process is underway and we think it should take three to five months from where we are right now, said Paytm, group chief financial officer, Madhur Deora, on Sunday. The central bank did not respond to an email seeking comments.

In March, Paytm denied a Bloomberg news report saying that RBI's servers were sharing information with China-based entities that indirectly own a stake in the firm.

Paytm is backed by China's Alibaba Group Holding and its affiliate Ant Group.

One 97 Communications Ltd, the parent of Paytm, reported a wider fourth-quarter loss due to higher payment processing, marketing and employee costs.

The company is on track to reach profitability by September 2023, according to Deora.

We are seeing good growth in high margin businesses and as a result we are seeing improvements in the contribution margin. He said that our indirect expenses will not grow as fast as last year as we don't expect to make any significant investments in new businesses or employee cost this year, as we have already made those in the last year.

In one of the country's biggest initial public offering last year, Paytm made its stock market debut in November last year, but the shares have since sunk 70 per cent.