Downloads:

• Paytm’s Q4 FY26 earnings release

Fintech company Paytm said it does not plan to pursue a non-banking financial company (NBFC) licence, as questions about the fallout from the Reserve Bank of India’s cancellation of Paytm Payments Bank Limited’s licence surfaced during the Q4 FY26 earnings call.

Responding to an analyst’s speculation that Paytm might seek a NBFC licence following the regulatory action against its banking arm, President and Group CFO Madhur Deora said, “The short answer is we’re not super excited about going for an NBFC licence.”

Focus on the co-lending model: Paytm currently offers loans through tie-ups with banks and other NBFCs. A lending licence would have allowed it to offer loans directly to customers and merchants, arguably a more lucrative model for the company.

However, the management said the company prefers a co-lending model, where it focuses on credit distribution, technology infrastructure, and collections, while lending partners manage capital, risk, and cyclicality. The Paytm CFO described it as a “win-win” arrangement.

Paytm’s remarks come less than two weeks after MobiKwik received the RBI’s approval for an NBFC licence. In January this year, PhonePe made a third attempt to secure an NBFC licence after previously applying in 2021 and 2023. Walmart-owned Flipkart already has an NBFC licence, allowing it to lend but not take deposits. Last year, Flipkart rival Amazon also acquired non-lender Axio.

After RBI action against payments bank, questions loom over wallet licence: During the earnings call, Paytm founder Vijay Shekhar Sharma remained tight-lipped about the impact of Paytm Payment Bank Limited’s shutdown. He said there were no implications from the cancellation of the payment bank’s licence, adding that the investment in PPBL had already been impaired as of March 31, 2024.

For context, the central bank cancelled PPBL’s banking licence last month, citing concerns around the bank’s management. It had already restricted the payments bank from accepting deposits or top-ups in 2024, effectively rendering the entity defunct.

As a result, Paytm shifted its payments business to UPI partnerships with banks, including Axis Bank, HDFC Bank and SBI, under the third-party application provider (TPAP) model.

Sharma also declined to share an exact timeline for applying for a Wallet licence. During the Q3 FY26 earnings call, he had said that the company planned to revive its Wallet business after resurrecting its postpaid business. 

Paytm posted a net profit of Rs 183 crore in Q4 FY26, compared to a loss of Rs 545 crore in the year-ago quarter. Revenue from operations rose more than 18% to Rs 2,264 crore during the quarter under review, up from Rs 1,912 crore a year earlier.

Also Read:

• Explained: Why did the RBI cancel Paytm’s banking licence?
• All you need to know about RBI’s restrictions on Paytm Payments Bank
• After Postpaid, Paytm Eyes Revival of Wallet: Q3FY26 Earnings Call