Introduction:

In today’s fast-paced digital era, the Banking, Financial

Services, and Insurance (BFSI) sector stands at the forefront of
innovation, continually reshaping the way individuals manage
their finances. Within this dynamic landscape, three significant
trends have emerged, each redefining the traditional notions of
banking and financial services.
Firstly, the concept of Equated Monthly Installments (EMI)
has revolutionized the way consumers approach large
purchases. Offering flexibility and affordability, EMIs allow
individuals to spread out the cost of expensive items over a
period, making them more accessible to a broader segment of
society. This financial tool has not only empowered consumers
but has also stimulated economic growth by boosting
consumption and encouraging investments.
Secondly, the rise of digital payments has seen traditional
payment methods, such as debit cards, facing stiff competition.
With the advent of mobile wallets and online payment
platforms, consumers are increasingly gravitating towards
more convenient and secure alternatives. This shift not only
challenges the dominance of debit cards but also underscores
the importance of technological innovation in shaping the
future of financial transactions.
Lastly, the emergence of fintech giants like Paytm has
significantly disrupted the BFSI landscape, blurring the lines
between traditional banking and digital finance. With its user-
friendly interface and diverse range of services, Paytm has
become synonymous with digital payments in India, catering to

1
millions of users across the country. Its seamless integration of
banking, payments, and financial services has set a
precedent for the industry, forcing traditional institutions to
adapt or risk becoming obsolete.
As the BFSI sector continues to evolve, driven by
technological advancements and changing consumer
preferences, it is imperative for industry stakeholders to
embrace innovation and adopt a customer-centric approach to
remain relevant in an increasingly competitive market. By
leveraging these trends effectively, the BFSI sector can not
only enhance financial inclusion but also drive economic
progress in the years to come.

2
 PROJECT – 1
EQUATED MONTHLY INSTALMENT
(EMI)

"EMI" stands for "Equated Monthly Installment." It's a fixed amount of payment that a
borrower needs to pay to a lender at a specified date each calendar month. EMI consists of
both principal amount and interest amount, calculated based onthe loan amount, the
interest rate charged, and the loan tenure (the period over which the loan is to be repaid).
Here's a breakdown of the components of an EMI:

PRINCIPAL AMOUNT
This is the initial amount of money borrowed or the outstanding balance of the loan.

INTEREST AMOUNT
This is the cost of borrowing money, expressed as a percentage of the principal amount
per year. It is typically calculated based on the reducing balance method, where the interest
is charged on the outstanding loan balance.

LOAN TENURE
This is the period over which the loan is to be repaid. It is usually stated in months or
years.
EMI is commonly used for loans such as home loans, car loans, personal loans, etc. The
advantage of EMI payments is that they allow borrowers to spread the cost of a large
purchase over several months, making it more manageable and budget-friendly. However, it's
important to note that while EMIs offer convenience, borrowers end up paying more than the
principal amount due to the interest charged.

THE BREAKUP OF PRINCIPAL AND INTEREST PAID IN TOTAL

When you make a loan payment, it typically consists of two components: principal
andinterest.

1. PRINCIPAL
This is the original amount of money borrowed. As you make payments, a portion of
each payment goes towards reducing the principal amount.

2. INTEREST
This is the cost of borrowing the principal amount. It's calculated based on the
interest rate and the remaining principal balance. In the early stages of a loan, a
larger portion of your payment goes towards paying off the interest.

3
Over time, as you make payments, the portion of your payment allocated to interest
decreases, while the portion allocated to principal increases. By the end of the loan
term,ideally, you will have paid off both the principal and the interest in full.

4
 ICICI Home Loan EMI Calculator
Loan amount = ₹ 1000000
Interest rate = 7.2%
Year of loan = 10 years
Monthly EMI = 11,714
Total interest = 4,05,702
Total amount = 14,05,702

2024

Month Principal Interest Total Payment Balance (₹)

Paid (₹) Charged (₹) (₹)

April 5714 6000 11714 994286

May 5748 5965 11714 988537

June 5782 5931 11714 982754

July 5817 5896 11714 976937

August 5852 5861 11714 971084

September 5887 5826 11714 964196

October 5923 5791 11714 959273

November 5958 5755 11714 953315

December 5994 5719 11714 947321

2025

Month Principal Interest Total Payment Balance (₹)

Paid (₹) Charged (₹) (₹)

January 6030 5683 11714 941290

February 6066 5647 11714 935224

March 6102 5611 11714 929121

5
 April 6139 5574 11714 922982

May 6176 5537 11714 916805

June 6213 5500 11714 910592

July 6250 5463 11714 904341

August 6288 5426 11714 898053

September 6325 5388 11714 891727

October 6363 5350 11714 885363

November 6402 5312 11714 878861

December 6440 5273 11714 872521

Principal Interest Total payment Balance (₹)

paid (₹) charged (₹) (₹)

866042
January 6479 5235 11714
859524
February 6517 5196 11714
852967
March 6558 5157 11714
846371
April 6596 5117 11714
839735
May 6635 5078 11714
833059
June 6675 5038 11714

826343
July 6715 4998 11714

819587
August 6756 4958 11714

812790
September 6796 4917 11714

805953
October 6837 4876 11714

799074
November 6837 6 4835 11714

792154
December 6919 4794 11714
2026

2027

Month Principal paid Interest Totalpayment Balance (₹)

(₹) charged (₹)
(₹)

January 6961 4752 11714 785193

February 7003 4711 11714 778190

March 7045 4669 11714 771145

April 7087 4626 11714 764058

May 7129 4584 11714 756928

June 7172 4541 11714 749755

July 7215 4498 11714 742540

August 7258 4455 11714 735281

September 7302 4411 11714 727978

October 7346 4367 11714 720978

November 7390 4323 11714 713242

December 7434 4279 11714 705807

2028

Month Principal paid Interest Total Balance (₹)

(₹) charged (₹) payment (₹)

January 7479 4234 11714 698327

February 7524 4189 11714 690803

March 7569 4144 11714 683234

7
 April 7614 4099 11714 675619

May 7660 4053 11714 667958

June 7706 4007 11714 660252

July 7752 3961 11714 652499

August 7799 3915 11714 644700

September 7845 3868 11714 636854

October 7893 3821 11714 628961

November 7940 3773 11714 621021

December 7988 3726 11714 613033

2029

Month Principal paid Interest Total Balance (₹)

(₹) Charged (₹) payment (₹)

January 8035 3678 11714 604997

February 8084 3629 11714 596913

March 8132 3581 11714 588780

April 8181 3532 11714 580598

May 8230 3483 11714 572368

June 8279 3434 11714 564088

July 8329 3384 11714 555758

August 8379 3334 11714 547378

September 8429 3284 11714 538949

October 8480 3233 11714 530468

8
 November 8531 3182 11714 521937

December 8582 3131 11714 513354

2030

Month Principal paid Interest Total Balance (₹)

(₹) charged (₹) payment (₹)

January 8634 3080 11714 504720

February 8685 3028 11714 496034

March 8737 2976 11714 487296

April 8790 2923 11714 478506

May 8842 2871 11714 469663

June 8896 2817 11714 460766

July 8949 2764 11714 451817

August 9003 2710 11714 442813

September 9057 2656 11714 433756

October 9111 2602 11714 424645

November 9166 2547 11714 415478

December 9221 2492 11714 406257

2031

Month Principal paid Interest Total Balance (₹)

(₹) charged (₹) payment (₹)

January 9276 2437 11714 396980

February 9332 2381 11714 387648

March 9388 2325 11714 378260

9
 April 9444 2269 11714 368815

May 9501 2212 11714 359314

June 9558 2155 11714 349755

July 9615 2098 11714 340140

August 9673 2040 11714 330466

September 9731 1982 11714 320735

October 97i9 1924 11714 310945

November 9848 1865 11714 301097

December 9907 1806 11714 291189

2032

Month Principal paid Interest Total Balance (₹)

(₹) charged (₹) payment (₹)

January 9967 1747 11714 281222

February 10026 1687 11714 271195

March 10087 1627 11714 261108

April 10147 1566 11714 250961

May 10280 1505 11714 240752

June 10269 1444 11714 230482

July 10331 1382 11714 220151

August 10393 1320 11714 209758

September 10445 1258 11714 199302

October 10518 1195 11714 188784

November 10581 1132 11714 178202

December 10644 1069 11714 167557

10
2033

Month Principal Interest Total Balance (₹)

paid (₹) charged (₹) payment (₹)

January 10708 1005 11714 156849

February 10773 941 11714 146075

March 10837 876 11714 135238

April 10902 811 11714 124335

May 10968 746 11714 113367

June 11033 680 11714 102333

July 11100 614 11714 91233

August 11166 547 11714 80066

September 11233 480 11714 68832

October 11301 412 11714 57531

November 11369 345 11714 46162

December 11437 276 11714 34725

2034

Month Principal paid Interest Total Balance (₹)

(₹) Charged (₹) payment (₹)

January 11505 208 11714 23219

February 11574 139 11714 11643

March 11644 69 11714 0

11
 PROJECT – 3
FIVE “C” PRINCIPLES OF LENDING

INTRODUCTION

Running a business often involves lending credit, a task that is far from easy. To safeguard this
crucial aspect, most businesses design and build a credit evaluation process. However, even seasoned
professionals may face challenges in initiating this process due to its complexity, planning, and
organizational requirements.

Amidst these challenges, several strategies can prove beneficial, and one such strategy is the
“5 Cs of credit” framework. While not a new concept, these 5 Cs serve as the foundational principles
employed by many credit management teams, often unknowingly. Understanding andembracing the
comprehensive framework of the 5 Cs of credit can streamline the planning of your next credit
evaluation process.

In this article, we will delve into the essence of the 5 Cs of credit and how they assist you in
determining whether conducting business with aborrower is a wise decision.

Lenders heavily rely on the 5 Cs of credit management to assess creditworthiness and

determine loan or credit product approvals.Additionally, these factors influence loan rates and terms,
withborrowers possessing stronger credit profiles offered more favorable rates and terms compared
to those with weaker credit profiles.

The 5 Cs of Credit analysis are - Character, Capacity, Capital, Collateral, and Conditions. They
are used by lenders to evaluate a borrower’s creditworthiness and include factors such as the
borrower’s reputation, income, assets, collateral, and the economic conditions impacting repayment.

12
CHARACTER

The first C of credit is Character, which refers to the customers’ reputation and credit
history. To assess their ability to repay a loan, creditteams usually use popular credit bureaus
such as D&B, Experian, and Equifax to look at the following criteria:

• Payment history
• Outstanding debts
• Customers’ credit score
• Past bankruptcies or foreclosures
• Any legal judgments against the customer
Character is a critical factor because it helps organizations determine the level of risk
involved in extending credit. As a customer, if you have a good credit history and a high credit
score, your supplier will view you asless of a risk and more likely to repay your debts on time.

CAPACITY

‘Capacity’ means whether the customer’s organization has enough funds to repay the
supplier team. If the customer has beenexperiencing unstable cash flows, then the credit teams
think twicebefore extending the line of credit.
When it comes to the investigation of cash flow stability, who could serve as an
alternative to a bank? Credit teams add mandatory fields intheir credit applications to extract
information such as bank references and trade references. Both of these vouch for the
availability of funds and assure the credit team that the customer will be able to repay.

Sometimes, credit teams also follow the news alerts to understand the customer’s financial
position, acquisitions, employee stability, etc.
COLLATERAL

13
 'Collaterals' are similar to the concept of a mortgage. If a customer can provide a
'collateral,' such as a fixed asset, it increases the possibility of getting a higher credit line as it
acts as a parameter of assurance to the credit management teams.

Most credit teams demand 'collaterals' from high-risk customers to avoidincurring bad debts
for their business.

CAPITAL

Capital refers to the assets owned and the amount of equity a customer has. Capital
includes financial and non-financial assets, and the credit teams get this information through
public financial statements. These teams will look at the value of the assets to assess the
customers’ net worth. They'll also take into account any investments that could be used as
collateral for the loan.

Capital is important because it gives credit teams a measure of security. If a customer

defaults on the credit owed, the supplier can seize their assets to recover the losses. As a
customer, the more capital you have, the less risky the loan is for the lender, and the more
likely you are to receive favorable loan terms.

CONDITIONS

Conditions encompass the current financial condition of the customer, which can be
measured by analyzing the company's financial statements, cash flow, balance sheet, and
income statement.

Additionally, credit teams review macroeconomic conditions, scrutinizing the country's

geopolitical situation, economic conditions, and the customer's industry.Conditions play a
crucial role as they impact the overall cost of credit.

RISK ASSESSMENTLenders use the 5 Cs of credit analysis to assess the level of

risk associated with
lending to a particular business. By evaluating a borrower’s character, capacity, capital,
collateral, and conditions, lenderscan determine the likelihood of the borrower repaying the
loan on time and in full. This information helps lenders to make informed decisions and
reduce their risk of default.

14
LOAN TERMS:

The 5 Cs of credit also play a crucial role in deterimning the loan terms offered to a
borrower. A borrower with strong creditworthiness maybe eligible for better loan terms, such
as lower interest rates, longer repayment periods, or higher credit limits. This incentivizes
borrowers to maintain good credit and financial health.

BUSINESS DECISION MAKING

Business owners looking to borrow money can also benefit from understanding the 5
Cs of credit management. By knowing the factors that lenders consider when evaluating
creditworthiness, business owners can take steps to improve their financial condition. This
may include improving their credit score, increasing capital reserves, or providing collateral
to secure the loan. This knowledge helps business owners make better financial decisions.

CREDITWORTHINESS MONITORING

The 5 Cs of credit management are not only important for initialloan approval but also
for ongoing creditworthiness monitoring. Lenders may use the 5 Cs to assess changes in a
borrower’s financial condition over time and determine whether the borrower continues to
meet the lender’s credit criteria. This monitoring helps lenders to manage their credit risk and
make informed decisions about future lending to the borrower.

DO YOU USE THE 5 CS OF CREDIT

The framework of the 5 Cs of credit is invaluable when evaluating a potential

borrower’s creditworthiness, managing risks, and making sound lending decisions.

A careful analysis of these five factors – character, capacity, capital, collateral, and
conditions – empowers credit management teams to devise a strategy that effectively assesses
a borrower’s ability to repay, sets appropriate credit limits, and ensures responsible lending
practices.

Whether you are evaluating a new credit application, reevaluating existing credit
relationships, or optimizing your credit portfolio, the 5 Csof credit serve as a comprehensive
guide for making data-driven decisions and safeguarding the financial interests of your
business.
CHALLENGES WITH TRADITIONAL CREDIT RISK ANALYSIS

15
LIMITED DATA

Traditional credit risk analysis methods rely on historical data, which may not provide
a complete picture of a borrower’s current financial situation. For example, a borrower’s
financial situation may have changed since the last credit check, and traditional credit risk
analysis methods may not account for these changes. This can lead to inaccurate credit risk
assessments and increase the risk of default.

SLOW AND MANUAL PROCESSES

Manual data collection and analysis can be time-consuming and labor-intensive.

This process can be particularly lengthy for large, complex loans, resulting in a
slowdown of the credit approval processand delays in extending credit.

Moreover, traditional credit risk analysis methods can lead to increasedcosts for lenders as
they require significant investments in time and resources.

LACK OF REAL-TIME MONITORING

Traditional credit risk methods don’t provide real-time updates on a borrower’s

financial situation, leaving lenders vulnerable to sudden changes in creditworthiness. For
example, a borrower may experience asudden drop in income, which can impact their ability
to repay a loan. If lenders are not aware of these changes in real-time, they face an increased
risk of financial losses.
INABILITY TO HANDLE BIG DATA

With the increasing amount of data available, traditional credit risk analysis methods
may struggle to handle the volume and complexity of big data. This can make it difficult for
lenders to analyze and make informed decisions about credit risk. As a result, lenders may

16
miss important information that could impact their credit risk assessments, leading to
inaccurate credit decisions.

To overcome these challenges, you need to rethink your approach to credit risk analysis. This
is where technology comes in – by leveraging advanced analytics and machine learning, you
can overcome the limitations of traditional credit risk analysis and improve your decision-
making processes.

In the next section, we’ll discuss how technology is revolutionizing creditrisk management
and how it can help us overcome these challenges.

HOW AUTOMATION IS REVOLUTIONIZING CREDIT RISK

MANAGEMENT

Credit risk management has traditionally been a time-consumingand manual process.

However, with the advent of automation, it has become more efficient and accurate.
Automating credit risk managementprocesses can help companies make informed decisions
about extending credit to customers, mitigating risk, and improving cash flow.

HERE ARE FOUR KEY BENEFITS OF AUTOMATION IN CREDIT

RISK MANAGEMENT:

REAL-TIME CREDIT RISK MONITORING

Automated tools offer real-time alerts for any changes in a customer’s credit profile,
enabling companies to make data-driven credit decisions. This helps to proactively
manage credit risk, prevent bad debt,and improve cash flow.

PREDICTIVE ANALYTICS FOR BLOCKED ORDERS

AI-based predictions can help companies make better credit decisionsby analyzing past
order volumes and payment patterns. This enables companies to proactively identify potential
blocked orders and take appropriate actions to mitigate risk.

FASTER CUSTOMER ONBOARDING

Automation can help reduce customer onboarding time by providing customizable
online credit applications. This enables companies to capture complete and accurate credit
data, leveraging pre-filled applications from sales or auto-extracted customer data from
CRM tools.
IMPROVED COLLECTIONS, PAYMENTS, AND DEDUCTIONS

Automated credit management software seamlessly integrates with collections,

payments, and deductions. It enables companies to share credit scores and risk analysis with
collectors, review collectible amounts to calculate adjusted credit exposure, and dynamically

17
update credit exposure leveraging payment and dispute information. This helps improve
collections, streamline payments, and reduce deductions.

The 5 C’s of credit help lenders evaluate risk and look at a borrower’screditworthiness.
They also help lenders determine how much an applicant can borrow and what their interest
rate will be.

CHARACTER

To develop a strong credit history, always make payments on time and try to keep your
credit utilization—which measures how much credityou’re using—low. If you’re unsure about
your personal credit, you can review your reports for free once a year at Annual
CreditReport.com.

You can also get a free score online from multiple places, including NerdWallet. If you need to
build your personal credit, strategies to do so include getting a secured credit card or credit-
builder loan and keeping your credit utilization relatively low.

Growing your business credit score can help with character, too (astraightforward first
step might be to get a business credit card).
Business credit is based on your company's history with debt repayment, not your personal
history. It can give lenders an additional piece of information that supports your company’s
creditworthiness, even if they don’t know your personal reputation.Capacity

Only apply for the credit you need. A low DTI ratio can help show lenders you have the
capacity for a new loan payment.If your cash flow is strong but your other C’s are lacking,
consider cash flow loans, which prioritize this factor when reviewing your application.
CAPITAL

Having cash on hand may help you qualify for a loan because it canindicate to lenders
your level of seriousness.

Nearly 70% of small-business owners use personal savings to start theirbusiness, according to
a 2023 survey from the U.S. Chamber of Commerce.[1] Make sure you categorize any

18
 personal investments in your business accurately in your accounting software, so you can keep
track of them later.

You don’t need to immediately funnel your life savings into your business. Startup business
credit cards can be a useful tool for buildingyour business early on though you will likely be
personally on the hook to pay off any balance your business can’t. Once you have six months
to a year in business, you’ll start to qualify for additional startupbusiness loan options.

COLLATERAL

You may need to provide collateral to take out some loans and credit cards. If you
always make on-time payments and follow the loan terms, you’ll get to keep your collateral.
Understand what options you have to collateralize. While real estate is common, you can also
secure a loan with equipment, inventory, accounts receivable, vehicles or other business assets.
Many lenders also file a UCC lien, which gives them the right to seize a borrower’s assets if
they default on their loan. Picking the right business structure can help protect your personal
assets from a lender that is trying to collect.

CONDITIONS
You might not have control over some of the conditions that affect your credit
application. But being aware of them will give you an idea ofwhether you might qualify for
credit.The condition of your business — whether it is growing or faltering — as well as what
you’ll use the fundsfor. It also considers the state of the economy, industry trends and howthese
factors might affect your ability to repay the loan.

Operating under favorable conditions can help ensure businesses repaytheir loans. Lenders aim
to identify risks and protect themselves accordingly. From a review of the competitive
landscape, supplier and customer relationships, and macroeconomic and industry-specific
issues.

19
 PROJECT - 6
PAYTM ISSUE
INTRODUCTION OF PAYTM

Paytm's kinda like a mixed bag right now. They're the king of digital payments in India, with tons of
users and services, but their stock kinda flopped after going public. They're finally making some money
now, but competition is fierce. Paytm didn't actually "ban"! It's their Payments Bank facing restrictions,
not user accounts. The Reserve Bank of India (RBI), India's financial watchdog, found some issues with
how Paytm Payments Bank handled things and said they can't take new deposits or offer credit services
anymore. So, existing users can't usetheir wallets or add money after February 29th. It's a bummer, but it's
not a personal ban, more like a temporary timeout for the bank itself.

What are the reasons why Paytm Payments Bank shut down?
Well, there are a few reasons why it had to close its doors.

The main issue was that the Reserve Bank of India (RBI), which is like the big boss of banks in India,
found that Paytm Payments Bank wasn't following all the rules.

They weren't doing enough to make sure people's accounts were safe and that their money wasn't being
used for anything shady like money laundering. This is a big no-no in the banking world!

So, the RBI decided to step in and put some restrictions on Paytm Payments Bank. They weren't allowed
to open new accounts, and they had to be extra careful with the accounts they already had. This made it
difficult for them to operate as a bank and ultimately led to their shutdown

History of the Crisis of Paytm

On January 31, the Reserve Bank of India (RBI) imposed major business restrictions on Paytm
Payments Bank Ltd (PPBL), including a bar on accepting fresh deposits and credit transactions after
February 29.
The central bank later extended the deadline to March 15.Here is how the events involving PPBL
unfolded in recent weeks.

20
 January 31: The RBI asks PPBL to stop accepting deposits and halt credit transactions or topups
in customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29,
2024.
The central bank said a Comprehensive System Audit report and subsequent compliance
validation report by external auditors revealed persistent non-compliance and continued material
supervisory concerns at the bank, warranting further supervisory action.

February 1: In an investor conference call, the company management says that its lending
partners have requested clarity on the RBI notification.
The company said it is engaging in conversations with the lenders to address their concerns.
Paytm has around 11 banking and non-banking financial company (NBFC) partners that lend to its
customers through their platform

February 4: The Confederation of All India Traders (CAIT) issues an advisory asking brick-
and-mortar businesses to switch from Paytm to other payment applications.
“The RBI has imposed certain restrictions, prompting CAIT to recommend that users take
proactive measures to protect their funds and ensure uninterrupted financial transactions. Large number
of small traders, vendors, Hawkers and women are making payments through Paytm andas such RBI
restrictions on Paytm could lead to financial disruptions for these people,” CAIT wrote in the February

4 advisory.

The association, which largely represents brick-and-mortar shops, urged traders to act promptly
to mitigate any adverse effects on their financial operations.

February 8: RBI Governor Shaktikanta Das, while addressing the monetary policy press
conference, says all of the regulator’s actions are driven by the need to ensure systemic stability and
protect depositors’ and customers’ interests.
“These aspects cannot be compromised. Individual entities should be mindful of these aspects for
their long-term success,’ Das said. “We have noted all these questions and clarifications which have
been sought from us and based on that, we will be issuing a FAQ sometime next week,” he

added.

21
 February 9: The board of Paytm backer One97 Communications Ltd forms a panel headed by
N. Damodaran, a former chairman of market regulator Securities and Exchange Board of India,
to advise Paytm Payments Bank Ltd on compliance and regulation.

The committee, led by Damodaran and comprising two other members, would work with the
board of One97 Communications to strengthen compliance and regulatory matters, the company

informed the exchanges.

The other two members of the committee are M.M. Chitale, a former president of the Institute of
Chartered Accountants of India (ICAI) and former governing Council Member of the Banking
Codes and Standards Board of India, and R. Ramachandran, a former Chairman and Managing
Director of Andhra Bank.

February 12: RBI Governor Shaktikanta Das says that the central bank will not review the

actions it has taken against Paytm Payments Bank.

Let me be very clear that there is no review of the action taken against Paytm Payments Bank.
The FAQ will deal with customer interest issues,” the RBI chief declared. Das added that the
business restrictions imposed on Paytm Payments Bank were a specific issue and there was no need to

worry about the entire system.

February 14: One97 Communications, in a clarification issued to exchanges, says the
Enforcement Directorate has “over time” asked for certain documents, which the company has
provided.
The company issued the clarification following media reports that the Enforcement Directorate
had filed a case against the company over alleged FEMA violations.

“One 97 Communications Limited, its subsidiaries and its associate, Paytm Payments Bank
Limited, have over time been receiving notices and requisition for information, documents and explanations
from the Authorities, including Enforcement Directorate (ED), with respect to the customers that may have
done business with the respective entities, and provided the required information, documents and
explanations to the Authorities,” the company said.

22
 February 16: The RBI issues its FAQs on the Paytm issue and extends the deadline for Paytm
Payments Bank Ltd (PPBL) to stop accepting fresh deposits and credit transactions to March 15
from February 29, as announced earlier.
The FAQs suggest that Paytm get a new QR code linked with other banks’ accounts in order to
use Paytm’s soundbox and POS terminal services after March 15.

The document also recommends that customers of Paytm Payments Bank make alternative
arrangements with another bank before March 15 for salary credit.

Later that day, Paytm announced a partnership with Axis Bank for the settlement of merchant
payments. The company issued a release stating that One97 Communications has shifted its nodal
account to Axis Bank via an escrow account.

The shift of the nodal account to Axis Bank will ensure seamless merchant settlements, as before,
the release from One97 Communications added.

February 23: The RBI says it has advised the National Payments Corporation of India (NPCI)
to examine a request by One97 Communication Ltd (OCL) to become a Third-Party Application
Provider (TPAP) for the UPI channel, for continued operation of the Paytm UPI app.
The central bank added that in the event of NPCI granting TPAP status to OCL, it may be
stipulated that ‘@paytm’ handles should be migrated in a seamless manner from Paytm Payments
Bank to a set of newly identified banks, to avoid any disruption.

“No new users are to be added by the said TPAP until all the existing users are migrated
satisfactorily to a new handle,” the RBI said.
For seamless migration of the ‘@paytm’ handle to other banks, the NPCI may facilitate
certification of 4-5 banks as Payment Service Provider (PSP) Banks, if they had demonstrated
capabilities to process high-volume UPI transactions, the central bank added.

This would be in line with NPCI norms on minimising concentration risk, the RBI added.

5 points to summarise the enhancement of Paytm among public in a trustable manner.

23
 I. What steps can Paytm take to regain investor confidence and stabilize its stock price?

Addressing Concerns:

• Improve financials: Show a clear path to profitability and revenue growth.

• Strengthen governance: Address transparency and independence issues.
• Outmaneuver competition: Differentiate themselves through strategies and investments.

Regaining Trust:

• Be transparent: Communicate openly and regularly with investors.

• Deliver on promises: Set achievable goals and demonstrably meet them.
• Focus on value: Prioritize initiatives that create long-term shareholder value.

Remember

• Consider market sentiment and external factors.

• Proactively engage with investors and address their concerns.
• Strategic stock buybacks might be an option.
Seek expert advice to tailor these suggestions to Paytm's specific situation.

II. What are the mistakes that should be realized by Paytm?

Having closely followed the "Paytm" case for some time, I've come across numerous facts and
technical information that deeply impacted me, Prompting deep thought. Understanding the
technicalities of the issue, particularly as a business owner, was crucial. I believe it's essential for
everyone to stay informed about the developments since the budget has been released. Amidst

various opinions, narratives, and technical aspects, one recurring realization is how ARROGANCE
can derail aspirations and goals. While having goals and being unstoppable in pursuit of them is
commendable, arrogance is damaging. The downfall of Paytm, a significant player in its sector, can
largely be attributed to arrogance, evident in interviews and public statements made by its owner.
While I refrain from passing judgment, observing the lives and actions of successful business
owners worldwide reveals a common trait: sense of groundedness. This quality seems natural in
those striving to elevate their businesses and achieve their goals.

III. What are the set of guidelines imposed by the RBI over the issues of Paytm?

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 Based on the answers given by the RBI for the FAQs asked by the public over the issues of Paytm, we
can easily summarise the basic guidelines implemented by the RBI over Paytm.

. Bank Accounts with Paytm Payments Bank

1. I have a savings or current account with Paytm Payments Bank. Can I

continue to withdraw money from this account after March 15, 2024? Can I continue
to use my debit card issued by Paytm Payments Bank?

Yes. You can continue to use, withdraw or transfer your funds from your account upto the
available balance in your account.

Similarly, you can continue to use your debit card to withdraw or transfer fundsupto the available
balance in your account

2. I have a savings bank or current account with Paytm Payments Bank. Can
I deposit or transfer money into this account after March 15, 2024?

No. After March 15, 2024, you will not be able to deposit money into your account with
Paytm Payments Bank. No credits or deposits other than interest, cashbacks, sweep-in from
partner banks or refunds are allowed to be credited.

3. I am expecting a refund in my account with Paytm Payments Bank after

March 15, 2024. Can this refund be credited into my account?

Yes. Refunds, cashbacks, sweep-in from partner banks or interest are permitted
credits into your account even after March 15, 2024.

4. What will happen to the Deposits maintained with partner banks through
‘sweep in/out’ arrangements, after March 15, 2024?

The existing Deposits of Paytm Payments Bank customers maintained with partner
banks can be brought back (sweep-in) to the accounts with Paytm Payments Bank, subject
to the ceiling on balance prescribed for a Payments Bank (i.e. ₹2 lakh per individual
customer at the end of day). Such sweep-ins for the purpose of making available the
balances for use or withdrawal by the customer will continue to be allowed. However, no
fresh deposits with partner banks through Paytm Payments Bank will be allowed after
March 15, 2024.

5. My salary is credited into my account with Paytm Payments Bank. Can I

continue to receive my salary into this account?

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 No. After March 15, 2024, you will not be able to receive any such credits into your
account with Paytm Payments Bank. It is suggested that you make alternative arrangements
with another bank before March 15, 2024 to avoid inconvenience.

6. I receive a subsidy or certain direct benefit transfers linked to my Aadhar

from the Government in my account with Paytm Payments Bank. Can I continue to
receive it into this account?

No. After March 15, 2024, you will not be able to receive any such credit into your
account with Paytm Payments Bank. Please arrange to change your linked account to
another bank before March 15, 2024 to avoid any inconvenience or disruption.

7. My monthly electricity bill is paid automatically from my bank account

with Paytm Bank Limited? Can this continue?

Withdrawal/debit mandates (such as National Automated Clearing House (NACH)

mandates) will continue to get executed till there is balance available in your account.
However, after March 15, 2024, credit or deposit in your accounts will not be allowed.
Therefore, to avoid inconvenience, it is suggested that you make alternative arrangements
through another bank, before March 15,2024.

8. My monthly OTT subscription is paid automatically through UPI from my

bank account with Paytm Payments Bank? Can this continue?

Withdrawal/debit mandates through automatic UPI mandates will continue to get executed till
there is balance available in your account. However, after
March 15, 2024, credit or deposit in your accounts will not be allowed. Therefore, to
avoid inconvenience or disruption, it is suggested that you make alternative arrangements
through another bank, before March 15, 2024.

9. The instalment (EMI) for my loan is automatically paid through my

account with Paytm Payments Bank. Can this continue?

Auto debit mandates will continue to get executed till there is balance available in your
account. However, after March 15, 2024, credit or deposit in your accounts will not be
allowed. Therefore, to avoid inconvenience, it is suggested that you make alternative
arrangements for setting up EMI payments through another bank before March 15, 2024.

10. The instalment (EMI) for my loan is automatically paid through my

account with a bank other than Paytm Payments Bank. Can this continue?

Yes, EMIs registered with any bank other than Paytm Payments Bank can continue.

Paytm Payments Bank Wallet

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 11. I have a wallet with Paytm Payments Bank. Can I continue to use money
from this wallet after March 15, 2024?

Yes. You can continue to use, withdraw or transfer to another wallet or bank account
upto the balance available in the wallet. Minimum KYC wallets 1 can, however, be used
only for merchant payments.

12. I have a wallet with Paytm Payments Bank. Can I top-up or transfer
money into this wallet after March 15, 2024? Can I receive money from any other
person into this wallet after March 15, 2024?

No. After March 15, 2024 you will not be able to top-up or transfer money into the wallet or
receive any credits, other than cashbacks, or refunds into this wallet.

13. I have a cashback due in my wallet with Paytm Payments Bank. Can I
receive this cashback after March 15, 2024?

Yes. Refunds and cashbacks are allowed to be credited.

14. I have a wallet with Paytm Payments Bank. Can I close this wallet and
have the balance transferred to my bank account with another bank?

Yes. You may approach Paytm Payments Bank or use its banking app to close
your wallet and transfer the balance to an account maintained with another bank in the
case of full KYC wallets. In the case of minimum KYC Wallets 2, you may use the available
balance or request for a refund.

FASTag issued by Paytm Payments Bank

15. I have a FASTag issued by Paytm Payments Bank. Can I continue to use it
to pay toll after March 15, 2024?

Yes. You can continue to use your FASTag to pay toll upto the available balance.
However, no further funding or top ups will be allowed in the FASTags issued by Paytm
Payments Bank after March 15, 2024. It is suggested that you procure a new FASTag
issued by another bank before March 15, 2024 to avoid any inconvenience.

16. I have a FASTag issued by Paytm Payments Bank. Can I recharge the
balance after March 15, 2024?

No. After March 15, 2024 you will not be able to top-up or recharge your FASTag issued
by Paytm Payments Bank. It is suggested that you procure a new FASTag issued by another
bank before March 15, 2024 to avoid any inconvenience.

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 17. Can I transfer the balance from my old FASTag issued by Paytm Payments
Bank to a new FASTag obtained from another Bank?

Credit balance transfer feature is not available in the FASTag product. Therefore, you
will have to close your old FASTag issued by Paytm Payments Bank and request the bank
for a refund.

National Common Mobility Card (NCMC) issued by Paytm PaymentsBank

18. I have an NCMC card issued by Paytm Payments Bank. Can I continue to
use it after March 15, 2024?

Yes. You can continue to use your NCMC card upto the available balance. However, you
will not be able to load or top up funds into the card after March 15, 2024. In order to avoid
inconvenience, it is suggested that you obtain an NCMC card issued by another bank or
non-bank pre-paid instrument (PPI) issuer, before March 15, 2024.

19. I have an NCMC card issued by Paytm Payments Bank. Can I add to its
balance through top-up, recharge, etc. after March 15, 2024?
No. After March 15, 2024 you will not be able to top-up or recharge your NCMC card
issued by Paytm Payments Bank. In order to avoid inconvenience, it is suggested that you
obtain an NCMC card issued by another bank or non- bank pre-paid instrument (PPI)
issuer, before March 15, 2024.

20. Can I transfer the balance from my old NCMC card issued by Paytm
Payments Bank to a new card obtained from another Bank?

Balance transfer feature is not available in the NCMC card. Therefore, you mayuse the
card upto the available balance. In case you have some more balance which you have not
been able to use, you may request Paytm Payments Bank for a refund.

Merchants using Paytm Payments Bank to receive payments

21. I am a merchant and I accept payments using a Paytm QR code, Paytm

soundbox or Paytm POS terminal, linked to another bank account (not with Paytm
Payments Bank). Can I continue to use this set-up even after March 15, 2024?

Yes. If your receipt and transfer of funds is linked to any bank account other than Paytm
Payments Bank, you can continue to use this arrangement even after March 15, 2024.

22. I am a merchant and I accept payments using a Paytm QR code, Paytm

soundbox, Paytm POS terminal linked to my bank account or wallet with Paytm
Payments Bank. Can I continue to use this set-up even after March 15, 2024?

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 No. After March 15, 2024 you will not be able to receive any credit into your bank
account or wallet with Paytm Payments Bank other than refunds, cashbacks, sweep-in from
partner banks or interest. In order to avoid any inconvenience or disruption, it is suggested
that you may obtain a fresh QR code linked to an account with another bank or wallet to
receive payments. You may also change your bank account details (in which you receive
payments) through your service provider.

Bharat Bill Payment System (BBPS)

23. Can I make payments through the Bharat Bill Payment System (BBPS) using
my account with Paytm Payments Bank?

Yes. You can continue to make payments from your Paytm Payments Bank account
through Bharat Bill Payment System upto the balance available in youraccount. Since you
will not be able to credit any further funds into your accounts or wallets with Paytm
Payments Bank after March 15, 2024, it is advised that you may make alternative
arrangements with another bank accountfor BBPS before March 15, 2024.
Aadhar enabled Payment System (AePS)

24. Can I make withdrawals from my Paytm Payments Bank account with
biometric authentication under Aadhar enabled Payment System?

Yes. You can continue to withdraw using the AePS authentication, upto thebalance available in
your account.

Money Transfer through UPI/ IMPS

25. Can I transfer my money into my Paytm Payments Bank account through
UPI/ IMPS after March 15, 2024?

No. You cannot transfer the money into your Paytm Payments Bank accountafter March 15,
2024.

26. Can I withdraw my money from my Paytm Payments Bank account

through UPI/ IMPS after March 15, 2024?

Yes. You can withdraw your money from Paytm Payments Bank accountthrough UPI/ IMPS
upto the balance available in your account.

Paytm Payments Bank Business Correspondent

27. I have an account with Paytm Payments Bank. Can the Paytm Payments
Bank Business Correspondent (also referred to as Paytm Payments Bank Agent) help
me in withdrawing funds from my account after March 15, 2024.

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 Yes. The Paytm Payments Bank Business Correspondent (Bank Agent) can help you to withdraw
money from your bank account upto the balance availablein your account.

Accounts frozen, lien marked etc.

28. What will happen to my Paytm Payments Bank account/wallet if there is a

lien or freeze marked on the directions of Law Enforcement or judicial authorities?

Any lien or freeze (full or partial) marked as per the instructions of any lawenforcement or
judicial authorities on the account/wallet of a customer with
Paytm Payments Bank will continue to be governed by the orders passed bysuch authorities.

29. What will happen to my Paytm Payments Bank account/ wallet if there is a
lien or freeze marked on account of internal policies of Paytm Payments Bank?

The bank has been directed to allow withdrawal or transfer to another bankaccount of the
customer, upto the available balance in the account / wallets.
Onboarding of new customers

30. What is the status of the Business restriction placed on Paytm Payments Bank
vide RBI Press Release dated March 11, 2022?

The business restriction dated March 11, 2022, prohibiting Paytm Payments Bank from
onboarding any new customers for any of its services continues to be in force. Hence,
Paytm Payments Bank cannot onboard any new customers after March 11, 2022.

Since RBI Has clearly showed off all the guidelines to the public in a clearly prescribed manner, public
becomes much aware.
How should Paytm consider the impact over the public?
The Reserve Bank of India (RBI) on Wednesday barred Paytm Payments Bank from accepting customer
deposits from 1 March, after an audit revealed “persistent non- compliances" and
“continued material supervisory concerns". This comes almost two years after the payments bank
was restricted from onboarding new customers, a restriction that is still in force. Mint spoke to
sectoral experts to piece together what today’s RBI notification means for Paytm customers.

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 They will not be impacted since it comes under the parent company (One 97 Communications) of
the payments bank. That apart, UPI or unified payments interface transactions would also work on
the app.
RBI has allowed such customers to extinguish their balances but they cannot load these

instruments with more money from 1 March.

IV. How should Paytm update themselves to sustain again in corporate world?

Every product has a scope to improve

1. User Experience - Information Architecture needs improvement.
2. Order Info – Use PULL system instead of PUSH method.
3. Paytm Mall - Better Search Indexing is required.
4. Localize More.

Conclusion:

In the realm of Banking, Financial Services, and Insurance (BFSI), several significant trends have emerged,
reshaping the landscape and influencing consumer behavior. The introduction of Equated Monthly Installments
(EMI) has revolutionized the way individuals approach big-ticket purchases, offering them greater flexibility
and affordability. This has not only stimulated spending but also bolstered the economy by encouraging
consumer participation in the market.

However, amidst these advancements, the traditional debit card seems to be losing its allure. With the rise of
digital wallets, contactless payments, and mobile banking applications, consumers are increasingly favoring
convenience over the conventional plastic card. This shift poses both challenges and opportunities for banks
and financial institutions, necessitating a reevaluation of their service offerings and delivery channels to remain
competitive in the evolving landscape.

One prominent player in this transformation is Paytm, a leading digital payments platform. Paytm's
innovative approach and user-friendly interface have disrupted the BFSI sector, capturing a significant market
share and transforming the way transactions are conducted in India. Its seamless integration of financial
services, including payments, banking, and investment options, has empowered millions of users and catalyzed
the digital transformation of the financial ecosystem.

In conclusion, the BFSI sector is undergoing a profound evolution driven by technological advancements
and shifting consumer preferences. While EMI has democratized access to credit, thedominance of digital
payments platforms like Paytm signals a paradigm shift in how financial services are accessed and utilized. To
thrive in this dynamic environment, stakeholders must embrace innovation, adapt to changing consumer
behaviors, and leverage technology to deliver personalized, seamless experiences that meet the evolving needs
of customers.

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