Jio to Acquire Paytm Wallet? Jio Financial shares up 13% after report

Jio to Acquire Paytm Wallet: In a surprising turn of events, Jio Financial Services has emerged as a potential suitor to acquire Paytm’s wallet business, sending Jio Financial shares soaring by 13%. The development comes as Paytm faces an existential crisis following the Reserve Bank of India’s (RBI) recent decision to prohibit the payment bank from accepting deposits or credits to customer accounts.

Jio to Acquire Paytm Wallet

According to a report by The Hindu Business Line, discussions about the acquisition have been ongoing for some time. Paytm CEO Vijay Shekhar Sharma’s team has been in talks with Jio Financial since last November, while discussions with HDFC Bank began just before the RBI’s ban on Paytm Payments Bank.

HDFC Bank and Jio Financial are currently the frontrunners in the race to acquire Paytm’s wallet business. This potential acquisition is part of a larger bailout plan, as Paytm grapples with the repercussions of the RBI’s decision.

Money Laundering Allegations

Recent reports have suggested the possibility of Paytm being used for money laundering activities, although the company vehemently denies these allegations. Both Paytm and its founder and CEO have stated that they are not under investigation by the Enforcement Directorate for money laundering charges. Nevertheless, Paytm’s shares have taken a hit, plummeting by 42% in just three days following the RBI’s directive.

Jio Financial’s Expanding Footprint

Jio Financial, which owns Jio Payments Bank, has been making significant strides in the digital banking space. The company has re-platformed to launch digital savings accounts and facilitate bill payments. With an extensive network of 2,400 business correspondents, Jio has also introduced debit cards for its customers. In addition, Jio has undertaken various initiatives, including the pilot launch of the Jio Voicebox, enabling Jio phones with UPI (Unified Payments Interface), and implementing QR codes across its ecosystem.

Paytm’s Assurance

Despite the uncertainty surrounding Paytm’s future, CEO Vijay Shekhar Sharma reassured employees during a virtual town hall meeting at Paytm Payment Bank Ltd (PPBL). He emphasized that Paytm is part of a larger family, and there is no need for undue concern. Sharma also expressed optimism about resolving the issues with the RBI, stating, “We are not completely sure of things…like what exactly went wrong. But we will figure out everything soon. We will reach out to the RBI to see what can be done.”

As the negotiations between Jio Financial, HDFC Bank, and Paytm continue, the Indian fintech landscape is poised for potential transformation. The fate of Paytm’s wallet business hangs in the balance, with stakeholders closely watching the outcome of these discussions.

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