Paytm to Conclude Loan Disbursement Suspension by February 14

In recent discussions within Paytm, plans have been unveiled to resume loan services following a brief hiatus due to operational challenges. Bhavesh Gupta, the President of One97 Communications, disclosed during a company conference call that the suspension of loan origination was necessitated by regulatory restrictions imposed on Paytm Payments Bank Limited (PPBL) by the Reserve Bank of India (RBI). These directives, issued on January 31, mandated PPBL to cease certain customer account activities by the conclusion of February.

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Despite the independence of Paytm's lending arm, a notable fraction of its merchants—approximately 10-15%—relying on PPBL accounts for autopay mandates, totaling around 60,000-70,000, faced potential disruptions in repayment channels. To avert any disruptions in repayments, Paytm initiated efforts to transition these obligations to alternate banking channels.

Gupta elucidated, "We will not be originating loans for maybe a couple of weeks before we solve for the operational challenges, and then we go back to normal."

The interruption in loan disbursements comes on the heels of an impressive performance in the December quarter, where Paytm facilitated loans amounting to Rs 15,535 crore. These loans comprised merchant loans, personal loans, and postpaid loans, catering to a diverse range of user needs. Notably, the number of unique users availing loans through Paytm witnessed a significant surge, growing by 44 lakhs over the past year to reach an impressive count of 1.25 crore.

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Allocations for various loan categories in December 2023 underscore Paytm's commitment to serving diverse financial needs. For merchant loans, Paytm earmarked Rs 3,579 crore, while Rs 4,460 crore was allocated for personal loans, and Rs 7,496 crore for postpaid loans, showcasing the breadth and depth of its financial offerings.

Despite these developments, an email inquiry seeking further clarification from Paytm remained unanswered at the time of reporting. However, with concerted efforts to address operational challenges, Paytm is poised to resume its loan services by February 14, signaling a return to normalcy and reaffirming its commitment to meeting the financial needs of its vast user base.