Jio Financial Services, a subsidiary of Mukesh Ambani’s Reliance Industries, is reportedly in discussions to acquire Paytm’s wallet business, following the Reserve Bank of India’s (RBI) ban on Paytm Payments Bank from accepting deposits or credits. As per reports, shares of Jio Financial surged by up to 14% upon revelations of ongoing talks between Paytm’s parent company, One 97 Communications, and Jio Financial, along with HDFC Bank, regarding the potential acquisition of Paytm’s wallet business.
The discussions between Paytm and Jio Financial allegedly commenced in November, while talks with HDFC Bank were initiated shortly before the RBI’s ban on Paytm Payments Bank. This potential acquisition is viewed as part of a larger rescue plan for Paytm, which is facing an existential crisis due to regulatory constraints.
Paytm has been embroiled in controversy and regulatory scrutiny, particularly regarding potential money laundering activities through its platform. Despite Paytm vehemently denying all allegations, its shares experienced a sharp decline of 42% within just three days following the RBI’s directive.
Jio Financial’s ownership of Jio Payments Bank, equipped with re-platformed digital savings accounts, bill payments, and a network of 2,400 business correspondents, positions it as a frontrunner in the race to acquire Paytm’s wallet business. During a virtual town hall with employees of Paytm Payments Bank Ltd (PPBL), Paytm CEO Vijay Shekhar Sharma reassured the team, emphasizing their commitment to understanding the situation and seeking resolution with the RBI.
The potential acquisition by Jio Financial introduces an intriguing dynamic to the unfolding narrative in India’s financial technology sector.
