Paytm restarts lending activities in tie-ups with SMFG India Credit, Shriram Finance; talks on with Muthoot Finance: Report

Paytm, whose banking came under stringent restrictions imposed by the Reserve Bank of India (RBI), has restarted lending operations after a pause of two months, Moneycontrol reported on Friday, April 5, citing sources who are privy to the development.

The company is issuing merchant loans in tie-up with existing allies Shriram Finance and SMFG India Credit (earlier known as Fullerton), the news portal reported, adding that Paytm is also negotiating with Muthoot Finance to onboard it as a lending partner.

The lending operations “resumed around March 21”, the persons aware of the development told Moneycontrol. “Over 500 crore loans have been disbursed so far, including top-ups from existing merchants and some new loans,” they added.

The development could not be independently verified. The company was yet to react to the news report.

‘Lenders are cautious’

According to Paytm's website, its digital loan partners are Poonawala Fincorp, Piramal Finance, Aditya Birla Finance, Clix Capital and Hero Fincorp, among others.

However, the sources who spoke to Moneycontrol said that the lenders are cautious. They said that lenders are yet to take a decision on the partnership and are continuing to verify books and product systems of Paytm to ensure that everything is in order.

Paytm had halted disbursing new loans as its partner banks and NBFCs sought more clarity on the RBI action against Paytm Payments Bank Ltd. The banking arm of Paytm was barred from accepting fresh deposits in customer accounts from March 15 onwards.

Shares of One97 Communications, the parent entity of Paytm, closed in the positive territory on Friday. The stock was up 1.7% at ₹417 on the NSE. Intraday, the scrip hit a high of ₹422.