Mukesh Ambani's Jio Financial Services to acquire Paytm wallet business?

Mukesh Ambani’s Jio Financial Services (JFS) is among the frontrunners to acquire Paytm’s wallet business, media reports said on Monday (February 5).

Jio Financial Services’ shares jumped to 16.25 per cent on Monday amid reports of JFS in talks with Paytm’s parent company One 97 Communications to buy its wallet business.

A report in Hindu BusinessLine said One 97 Communications has been in talks with JFS since November 2023 to sell its wallet business. It also added that HDFC Bank is also in talks since last month just before the Reserve Bank of India’s (RBI) action against Paytm Payments Bank.

Last week, RBI ordered Paytm Payments Bank Ltd (PPBL), a restricted bank that can take deposits but cannot lend, to not take any further deposits or conduct credit transactions or carry out top-ups on any customers accounts, prepaid instruments, wallets, cards for paying road tolls after February 29.

Paytm wallet customers can use money till the time their balance is exhausted. They cannot add money after February 29. And in case RBI does not relent, top-up for Paytm wallet will stop and transactions through it would no longer can be carried.

According to a PTI report, citing sources, money laundering concerns and questionable dealings of hundreds of crores of rupees between Paytm and its lesser-known banking arm had led to RBI’s action.

The PPBL, sources said, had lakhs of non-KYC (Know Your Customer) compliant accounts and in thousands of cases single PANs were used for opening multiple accounts.

There were instances where the total value of transactions - running into crores of rupees, much beyond regulatory limits in minimum KYC pre-paid instruments raising money laundering concerns, sources said.

According to an analyst, Paytm Payments Bank has about 35 crore e-wallets. Of this, about 31 crore are dormant while only about 4 crore would be operative with either no balance or a small balance.

(With agency inputs)