Shares of Jio Financial Services on Monday rallied 4% to the day’s high at Rs 263.30 on BSE after a newspaper report said crisis-ridden One 97 Communications is in talks with Jio Financial Services and HDFC Bank to sell its wallet business.
Quoting senior fintech and banking sector senior executives with knowledge of the matter, The Hindu Business Line said HDFC Bank and Jio Financial are said to be among the forerunners to acquire Paytm’s wallet business, which is housed under Paytm Payments Bank.
While Vijay Shekhar Sharma’s team is said to have been in talks with Jio Financial since last November, talks with HDFC Bank began just ahead of RBI’s ban on Paytm Payments Bank, according to the report which also said that as part of a larger bailout plan, Jio may offer to acquire Paytm Payments Bank.
Paytm has been facing an existential crisis ever since the RBI barred the payment bank from accepting any deposits or credits to customer accounts. The regulator is also said to be considering cancelling the banking licence as well on possible money laundering and know-your-customer (KYC) violations at Paytm.
RBI also found KYC checks for hundreds of thousands of customers were missing, and some of the accounts were either owned by individuals with past issues with enforcement agencies or had abnormal balances, amounting to crores of rupees in some cases. The central bank has flagged multiple instances of a single permanent account number being used to open more than 1,000 accounts.
Security agencies are looking at the possibility of the entity being used as a front to launder money, ET had reported earlier.
Paytm has, however, denied reports that neither the company nor its founder and CEO are being investigated by the Enforcement Directorate on money laundering charges.
Jio Financial, on the other hand, owns Jio Payments Bank had successfully re-platformed to launch digital savings accounts and bill payments with a ground network of 2,400 business correspondents. It has also launched debit cards.
In the payment solutions business, Jio has carried out a pilot launch of Jio Voice box, enabled Jio phones with UPI, and is implementing QR codes across the ecosystem.
JFSL has successfully completed sandbox for consumer durable loans and personal loans. However, post RBI tightening on consumer unsecured lending the company has increased its focus on secured lending including leasing as a product.
Subsidiaries of JFSL include Jio Finance, Jio Insurance Broking, Jio Payments Bank, Jio Payments Solutions, a proposed AMC, and a leasing subsidiary.