Attempts are being reportedly made by the fintech firm to persuade the auditors to accept a management statement or a legal opinion regarding the feasibility of the company.
Paytm Payments Bank Ltd. (PPBL) is in conflict with its auditor, JC Bhalla & Co., which has informed the company that it must qualify the certification of its FY24 accounts with comments on the bank's viability. This is as per a report by the Economic Times.
This concern arises because regulatory restrictions have nearly halted the bank's operations, according to the report. On January 31 of this year, the central bank imposed restrictions on Paytm Payments Bank due to its persistent non-compliance with regulatory practices. The RBI stated that no additional deposits, credit transactions, or top-ups will be permitted in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. Since then, the market share of the fintech firm has decreased.
Read: Paytm Sees 19% Growth in Flight Bookings in January-March Quarter
Meanwhile, the auditor’s suggestion has been opposed by PPBL, and the company has said that the Paytm brand is robust. PPBL has further added that they will infuse capital to revive their brand.
While refusing to comment on the matter, JC Bhalla & Co. told the Economic Times, “Our professional code of conduct does not permit us to comment on client matters.”
Attempts are being made by the fintech firm to persuade the auditors to accept a management statement or a legal opinion regarding the feasibility of the company, according to the report. The report also adds that One97 Communications’ senior management is looking for the intervention of Centra Bank.
Speaking to the Economic Times, a source said, “RBI has not given any indication to the PPBL that it would be allowed to resume operations (such as mobilize deposits and onboard new customers), nor has it set conditions such as completing KYC of accounts to restore permissions.”
The report further adds that it is now directed to wind down operations and move all companies to One97 Communications as the chance to address compliance issues has passed.