Paytm's Strategy: Why It's Not Pursuing An NBFC Licence

Despite recent regulatory challenges with its payments bank, Paytm is prioritising its existing payments market and partnership models over obtaining a non-banking financial company (NBFC) licence.

Key Points

Paytm is not actively pursuing a non-banking financial company (NBFC) licence.
The company prefers a partnership model for lending, focusing on distribution and technology.
Paytm sees significant growth opportunities in its existing payments market.
RBI cancelled Paytm Payments Bank's licence due to non-compliance.
Paytm reported a consolidated profit for the fourth quarter and financial year.

Fintech major One97 Communications, which operates the Paytm brand, is currently not excited about a non-banking financial company (NBFC) licence, its Group CFO said on Thursday.

During the company's Q4 earnings call on Thursday, Paytm President and Group CFO Madhur Deora said, "We're not super excited about going for an NBFC licence".

Paytm's Partnership-Driven Strategy

He emphasised Paytm's preference for a "win-win" partnership model where it handles distribution, technology, and collections, while its blue-chip lending partners manage capital, risk, and cyclicality.

"We have a very large payments market; that market is growing, and our market share is growing, and that combined with low penetration means that the opportunity in the short to medium term already is very, very large," he said.

RBI Action Against Paytm Payments Bank

Last month, the RBI cancelled the banking licence issued to Paytm Payments Bank for non-compliance with norms, saying the affairs of the bank were conducted in a manner detrimental to the interest of its depositors.

The bank failed to comply with the conditions stipulated in the payments bank licence issued to it, the central bank said.

Financial Performance and Outlook

One97 Communications, in a regulatory filing, had said the company has no exposure to Paytm Payments Bank (PPBL), as it had already impaired its investment in the beleaguered entity as of March 31, 2024.

Paytm on Wednesday reported a consolidated profit of Rs 183 crore for the fourth quarter ended March 2026, a turnaround from a loss of Rs 545 crore a year ago.

The consolidated revenue from operations grew 18.4 per cent to Rs 2,264 crore during the reporting quarter from Rs 1,912 crore in the March 2025 quarter.

During the financial year ended March 2026, Paytm posted a consolidated profit of Rs 552 crore compared to a loss of Rs 663 crore in FY25.

The annual revenue from the operations of Paytm increased by 22.2 per cent to Rs 8,437 crore in FY26 from Rs 6,900 crore in FY25.

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