Paytm Payments Bank's auditor questions viability: Report
PPBL fears that an auditor's qualification stating the company is not a going concern could jeopardize its efforts to secure a payment aggregator licence for Paytm Payments Services Ltd.
Paytm Payments Bank Ltd (PPBL) auditor JC Bhalla & Co. has raised concerns over the bank's viability amid regulatory curbs that have nearly halted its business.
PPBL, which is 49% owned by One97 Communications and 51% by founder-promoter Vijay Shekhar Sharma, fears that an auditor's qualification stating the company is not a going concern could jeopardize its efforts to secure a payment aggregator licence for Payments Services Ltd, said a report by The Economic Times.
PPBL has contested the auditor’s suggested qualification, arguing that the strong Paytm brand can support a revival plan, bolstered by an infusion of capital.
In accounting, a going concern refers to a business expected to meet its financial obligations and continue operating without the threat of liquidation for at least the next 12 months.
The report said that efforts are going on to convince the auditors to accept a management representation or legal opinion on the viability of the business.
The senior management at One97 Communications is seeking Reserve Bank of India's (RBI) intervention, but the central bank is unlikely to act until the annual report is filed, the report said.
The RBI has not indicated whether PPBL will be allowed to resume operations or set conditions for restoring permissions. Instead, it has directed PPBL to wind down operations and transfer all businesses to One97 Communications.
The RBI has restricted PPBL from taking further deposits, conducting credit transactions, and performing top-ups on customer accounts, prepaid instruments, wallets, and cards since February 29.
Edited by Megha Reddy