Hitting out at digital wallets, Aditya Puri, MD, HDFC Bank on Friday said that he sees no future in digital wallets! He further said that Paytm cannot be Alibaba as the government doesn’t allow replication of model. In a conversation with ET Now Puri told the business news channel, “Current loss of Paytm is at Rs 1600 crore. It’s current economic model is doubtful.” When asked about demonetisation he replied, “Demonetisation is being demonised for nothing. Larger base of people have started paying income tax post demonetisation.”
With Paytm adding five lakh customers and doing 60 lakh transactions per day, it was the biggest beneficiary of PM Narendra Modi’s demonetisation drive. Founder and CEO, Paytm, Vijay Shekhar Sharma told ET Now that only 20% transactions were offline before demonetisation. “Offline payments are becoming bigger than online payments for us,” he said. We want to become the digital transactions leader, he added.
Earlier this week, Paytm founder Vijay Shekhar Sharma told CNBC TV 18 that it expects to lose 20-30% of its offline category customers after March 13, when the Reserve Bank of India takes the limits off from cash withdrawals. “If we retain 70% of what we have built, we still have a larger (offline) than online category, and that’s where the business is for us,” Vijay Shekhar Sharma said. Paytm has already seen 15-20% dip in its offline customers in February so far, Sharma said. “This has become a true battle of convenience and value,” he said, adding that as far as cash is concerned, consumers have historical affinity and convenience associated with it.
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Meanwhile, Aditya Puri of HDFC Bank recently said the demonetisation move is positive in the long-run and the country will continue to remain a bright spot. “Demonetisation is good. I am extremely positive about its outcome. The worst is behind us and the elephant has gone, the tail is left, and, hopefully, it will go away as well, by the middle of the next month,” he said.
Earlier today HDFC Bank again reached the prescribed foreign investment limit for Indian companies, the Reserve Bank said today, just a day after such inflows had gone below the ceiling. The threshold limit for foreign holding had gone below the prescribed percentage yesterday enabling foreign investors to buy the stock. “The foreign shareholding by ADR/GDR/FIIs/FPIs/FDI/NRIs/PIOs in HDFC Bank Ltd has crossed the overall limit of 74 per cent of its paid-up capital,” RBI said in a notification.
Therefore, no further purchases of shares of this company would be allowed through stock exchanges in India on behalf of Foreign institutional Investors (FIIs)/Foreign Portfolio Investors (FPIs)/ Non-Resident Indians (NRIs)/ Persons of Indian Origin (PIOs), RBI said.