One97 Communications Limited (OCL)who own Pay, on Wednesday, said it was consciously reducing its loan disbursements below ₹50,000. At the same time, this fintech major has decided to expand its credit distribution activities to focus more on higher loans for consumers and merchants.
This happens a few days later Reserve Bank of India (RBI) increased risk weights – the capital that banks must set aside for each loan disbursed – for banks and NBFCs from 25 to 125 per cent on retail loans.
“Based on the recent macroeconomic development and regulatory guidance, in consultation with lending partners, in line with its continued focus on creating a healthy portfolio, the Company has recalibrated the portfolio origination of less than ₹50,000, which is primarily the postpaid loan product. and will now represent a smaller portion of its loan distribution business going forward,” Paytm said in a statement, referring to the recent RBI directive.
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Merchant loans, which are provided to MSMEs in the form of business loans, will continue to be a priority for Paytm. As these loans are provided for commercial purposes to small traders, they are not affected by the recent regulatory guidelines.
A Paytm spokesperson said: “As the loan distribution business matures, we see new opportunities to expand to offer high-value personal and business loans. We will continue to focus on the high quality of our lending partners’ portfolio, as well as strict adherence to risk and compliance. We have seen great scale and acceptance of our loan distribution business, so we believe this expansion will further help us grow our business.
Paytm continues to add banks and NBFCs as lending partners for its loan distribution business.
