Is Paytm a NBFC?

Paytm is fintech and its subsidiary Paytm Entertainment could be classified as a Non Banking Financial Company (NBFC). As per rules of the RBI, a company has to register itself as NBFC, if a company derives 50% of its income and total assets from financial assets.You can read about the Types of Non Banking Financial Institutions – Functions & Objectives in the given link.

Recently, Paytm Entertainment exceeded this cap of 50% when it gave a one-time loan during Covid crisis. An example of Indian Payments Bank is Paytm Payments Bank. It was established in 2015 after receiving approval from the Reserve Bank of India (RBI) in 2015. It offers financial services such as current account, savings account, debit card.

Further readings:

  1. NBFCs & IBC: RSTV – Big Picture Discussion on the RBI’s move to resolve NBFCs under insolvency law
  2. Insolvency And Bankruptcy Code (IBC) – IBC Amendment Bill 2021 [UPSC Notes GS III]

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