Paytm has got customers by way of cashbacks, not by rendering companies: Aditya Puri

MUMBAI :

Veteran banker Aditya Puri on Tuesday raised questions on Paytm‘s enterprise mannequin, saying the not too long ago listed monetary companies firm has earned customers not by rendering companies however by way of cashbacks.

Puri, who led HDFC Bank from inception and made it into the biggest within the non-public sector area by the time he retired in 2020, additional questioned Paytm’s mannequin, questioning the place are the income if the corporate manages a lot of funds.

The remarks come amid a steep decline in Paytm‘s shares, which are actually buying and selling 75 per cent decrease than the worth at which buyers purchased them on the preliminary public providing. This is not the primary time that Puri has gone public together with his issues on the fashions of such corporations.

“Paytm… he makes payments, when did he make profit,” Puri requested, talking at an occasion organised by the IMC Chamber of Commerce on the University of Mumbai.

Puri stated in contrast to a financial institution, which books revenues for providing its companies and studies revenue, Paytm has garnered its tens of millions of customers by providing cashbacks.

Stressing on the hardwork concerned in elements like cross-selling, Puri stated years of work needed to go in earlier than HDFC Bank might enhance its cross-selling capabilities within the auto loans phase regardless of proudly owning the customers by advantage of providing them different companies.

Puri, who confronted some questions on the practices adopted by auto loans vertical of HDFC Bank in the direction of the top of his tenure, stated company governance in your complete nation is an issue and now we have put a “halo” round it.

He stated company governance is a cultural side, which has to be set from the highest in an organisation and added that the RBI is taking good efforts at enhancing the identical at lenders.

Puri stated service suppliers like Amazon and Google Pay can not begin a financial institution of their very own and in the event that they do, then they must be take care of the slew of rules that industrial banks must observe.

A financial institution has a model, credibility and owns a buyer whereas a funds firm solely rides on the groundwork finished by the financial institution, he stated, stressing that the lender must be paid for making such service-delievry doable.

Puri stated semi-urban and rural markets have all the required elements for financial progress however lack assist from monetary establishments who’re unwilling to cater to the wants.

Stating that bankers are afraid about mortgage repayments in such areas, Puri advised a authorities assure set-up to take care of the issues and in addition make banking companies supply higher. 

This story has been printed from a wire company feed with out modifications to the textual content.

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