Paytm founder Vijay Shekhar Sharma has outlined the company's focus on delivering a long-term, sustainable and profitable business model to shareholders in a letter.
“After resolving many of the challenges that we faced, we are now refocused on our path to deliver a long-term, sustainable and profitable business mode," he wrote in the letter.
The Paytm head said the fintech company plans to focus on artificial intelligence (AI)-based cost savings measures and build AI-first products to cater to small merchants and micro-businesses.
Paytm also claims that the company has identified significant savings through AI and expanded in areas where the future of technology is heading.
Vijay Shekhar Sharma acknowledged that the last financial year was a learning experience for the fintech company and said that the company will focus on free cash flow generation for the rest of the year.
“In the last quarter, we encountered regulatory action on our associate entity Paytm Payments Bank Limited (PPBL), which presented significant challenges and provided us with many valuable lessons,” he said.
Paytm reported a net loss of ₹840 crore in Q1 FY 25, up from ₹550 crore in the previous quarter and ₹338 Crore in the same quarter last year.
Earlier this year, due to non-compliance issues, the Reserve Bank of India directed Paytm Payments Bank to restrict its operations after February 29, 2024.
RBI banned transactions such as deposit and credit facilities, no top-up on prepaid and post-paid accounts, fast tag recharge, and UPI transactions. The customers could, however, withdraw funds from their accounts.
The RBI issued the directive on allegations of non-compliance with KYC norms and money laundering concerns. The payments bank came under the central bank's scrutiny for the first time in 2018 when the RBI halted the opening of new accounts due to licensing violations and non-compliance with KYC norms.
In 2021, the payments bank was fined ₹1 crore for submitting false information.
In 2022, Paytm was banned from acquiring new customers. Paytm Payments Bank is the banking arm under One97 Communications founded in 2017 by Vijay Shekhar Sharma.
