Paytm Opts Out Of NBFC Licence: What's The Strategy?

Paytm has announced it will not pursue a Non-Banking Financial Company (NBFC) licence, choosing instead to focus on its existing partnership model for financial services.

Key Points

Paytm has ruled out applying for a Non-Banking Financial Company (NBFC) licence.
Paytm prefers its current partnership model for lending, focusing on distribution and technology.
The RBI previously cancelled Paytm Payments Bank's licence due to non-compliance.
Paytm reported a consolidated profit of Rs 183 crore in Q4, marking a significant turnaround.
Paytm's annual revenue grew by 22.2 per cent to Rs 8,437 crore in FY26.

Fintech major One97 Communications, which operates the Paytm brand, has ruled out plans to apply for a Non-Banking Financial Company (NBFC) licence.

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 Strategy

He noted Paytm's preference for a "win-win" partnership model where Paytm 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 company 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 in the fourth quarter ended March 2026, a turnaround from a loss of Rs 545 crore in the same period a year ago.

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

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