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RBI scraps Paytm Bank licence; Pronto's back-to-back funding
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RBI has cancelled Paytm Payments Bank licence over compliance lapses. This and more in today's ETtech Top 5.
Also in the letter:
■ IT's bittersweet Q4
■ FM meets bankers amid Mythos scare
■ Krafton CEO on Indian bets
Vijay Shekhar Sharma, CEO, Paytm
The Reserve Bank of India (RBI) on Friday cancelled the banking licence of Paytm Payments Bank, more than two years after first imposing restrictions over rule violations, including lapses in customer due diligence.
What happened: The central bank said Paytm Payments Bank can no longer conduct banking business under the Banking Regulation Act. Its observations are as follows:
What does this mean: Paytm Payments Bank, backed by One 97 Communications, held a payments bank licence since August 2015 that allowed it to accept small deposits but not lend.
In January 2024, the RBI ordered it to stop taking fresh deposits over non-compliance issues tied to customer due diligence, fund use, and technology infrastructure. Since then the bank operated as a third party player on UPI.
What now: Paytm has anyway started focusing on building a fintech distribution platform building its business around lending, wealth management and UPI payments.
Anjali Sardana, CEO, Pronto
US-based tech investor Lachy Groom, known for early bets on crypto and software firms, is in talks to back instant househelp startup Pronto with a $15-20 million cheque, people in the know told ET.
Valuation jump: The round is set to value Pronto at around $200 million, roughly twice its worth after the last fundraise, which closed in March. Pronto had then raised $25 million at a $100 million valuation.
Funding surge: The new capital raise comes as the instant help sector attracts aggressive risk capital amid rapid user growth.
Sector snapshot: A Morgan Stanley report said Urban Company’s InstaHelp unit leads the segment on monthly and daily active users, but Pronto clocked faster month-on-month growth in March on both metrics.
On app downloads, Pronto held the largest share at 43%, ahead of Urban Company at 31% and Snabbit at 26%.
Investor playbook: Groom, cofounder and co-CEO of San Francisco-based robotics firm Physical Intelligence, has backed several Indian startups, including Bengaluru’s Even Healthcare, drone startup Airbound, and climate-tech company Alt Carbon.
Also Read: ETtech Profile | Anjali Sardana: the 23-year-old Pronto founder behind a $100 million house-help startup
IT stocks came under pressure on Friday after mixed Q4 numbers and a soft outlook from the sector’s biggest names.
What happened: Heavyweights on the BSE IT index, including Infosys, TCS, HCLTech and Wipro, traded lower and pulled the index down about 5% by close.
Why the selloff:
Weak guidance:
India will build a real-time threat-intelligence-sharing system among banks, CERT-In, and other agencies to spot emerging AI-driven cyber risks more quickly, the finance ministry said after a meeting chaired by Nirmala Sitharaman.
Hunting vulnerabilities: Sitharaman and IT minister Ashwini Vaishnaw examined how new AI models could be used to weaponise software flows, following concerns around Anthropic’s Mythos model.
She urged banks to beef up cybersecurity teams, being in specialised external experts where needed, and report suspicious activity or cyber incidents to authorities without delay.
Why it matters: Officials warned that the latest AI models create a new class of threats that demand tighter vigilance, sharper coordination and pre-emptive action. The meeting was attended by the RBI, NPCI and CERT-In, underscoring the gravity of the issue for the financial system.
China’s DeepSeek has released a new AI model, V4, a year after its viral breakout. The startup has put out a preview version and says the model boosts agents’ capabilities, world knowledge, and reasoning.
New stakes: This launch injects fresh urgency into the China-versus-US AI arms race and follows last year’s DeepSeek shock, when its low-cost model outperformed several marquee US systems.
OpenAI’s latest: Sam Altman’s OpenAI has also rolled out GPT-5.5, described as its smartest model so far for research-oriented tasks, including improving its own models. The company calls it “a new class of intelligence for real work and powering agents.”
CH Kim, CEO, Krafton
Five years after entering the country with PUBG, Korean gaming publisher Krafton Inc is doubling down on the Indian market.
Krafton’s roadmap: The company plans to broaden its game portfolio, back local developers and step up investments in studios and consumer internet startups to build a larger gaming ecosystem in India.
Quote, unquote: “We want games to be created in India to cater to Indian users. But we also want games made in India to be exported outside, so it can become a global phenomenon,” said CH Kim, chief executive of Krafton Inc, to ET in an exclusive interview.
Fresh capital: Earlier this week, Krafton, alongside fellow South Korean giants Mirae Asset and Naver, launched a Rs 6,000 crore tech-focused fund to invest in early to growth-stage startups.
Backdrop: PUBG Mobile remains banned in India, but Krafton launched Battlegrounds Mobile India in 2021. The title now has about 260 million users and consistently ranks among the country’s three top revenue-generating games.
Also in the letter:
■ IT's bittersweet Q4
■ FM meets bankers amid Mythos scare
■ Krafton CEO on Indian bets
RBI cancels Paytm Payments Bank licence
The Reserve Bank of India (RBI) on Friday cancelled the banking licence of Paytm Payments Bank, more than two years after first imposing restrictions over rule violations, including lapses in customer due diligence.
What happened: The central bank said Paytm Payments Bank can no longer conduct banking business under the Banking Regulation Act. Its observations are as follows:
- The bank's affairs and management were not in the interest of depositors or the public.
- The bank failed to follow the conditions of its Payments Bank licence.
- It called out the management for being prejudicial to the interest of the depositors.
- The central bank will move to wind up the bank and the fintech has enough liquidity to repay its deposit liabilities.
What does this mean: Paytm Payments Bank, backed by One 97 Communications, held a payments bank licence since August 2015 that allowed it to accept small deposits but not lend.
In January 2024, the RBI ordered it to stop taking fresh deposits over non-compliance issues tied to customer due diligence, fund use, and technology infrastructure. Since then the bank operated as a third party player on UPI.
What now: Paytm has anyway started focusing on building a fintech distribution platform building its business around lending, wealth management and UPI payments.
Tech investor Lachy Groom in talks to back Pronto; valuation to double
US-based tech investor Lachy Groom, known for early bets on crypto and software firms, is in talks to back instant househelp startup Pronto with a $15-20 million cheque, people in the know told ET.
Valuation jump: The round is set to value Pronto at around $200 million, roughly twice its worth after the last fundraise, which closed in March. Pronto had then raised $25 million at a $100 million valuation.
Funding surge: The new capital raise comes as the instant help sector attracts aggressive risk capital amid rapid user growth.
- Pronto has raised more than $36 million in funding as of March.
- Rival Snabbit has raised about $55 million so far, and is in talks to mop up another $50-60 million.
Sector snapshot: A Morgan Stanley report said Urban Company’s InstaHelp unit leads the segment on monthly and daily active users, but Pronto clocked faster month-on-month growth in March on both metrics.
On app downloads, Pronto held the largest share at 43%, ahead of Urban Company at 31% and Snabbit at 26%.
Investor playbook: Groom, cofounder and co-CEO of San Francisco-based robotics firm Physical Intelligence, has backed several Indian startups, including Bengaluru’s Even Healthcare, drone startup Airbound, and climate-tech company Alt Carbon.
Also Read: ETtech Profile | Anjali Sardana: the 23-year-old Pronto founder behind a $100 million house-help startup
IT stocks fell after mixed Q4 results and weak outlook from major companies
IT stocks came under pressure on Friday after mixed Q4 numbers and a soft outlook from the sector’s biggest names.
What happened: Heavyweights on the BSE IT index, including Infosys, TCS, HCLTech and Wipro, traded lower and pulled the index down about 5% by close.
Why the selloff:
- Sequential revenue growth is slowing despite steady deal flow and stable margins.
- Project execution is facing delays, and ramp-ups are taking longer.
- Multi-year high growth has cooled to mid-single digits, sparking concerns about AI-led deflation and revenue cannibalisation.
- Investors fear valuations do not fully reflect this slower growth profile.
Weak guidance:
- HCLTech: Services revenue guidance 1.5%–4.5%, nearly half of market expectations.
- Infosys: FY27 revenue growth guidance 1.5%–3.5%, below expected 3%–5%.
- Wipro: Guides for flat to -2% sequential revenue in Q1 FY27 due to slower ramp-ups.
FM Sitharaman, IT minister Vaishnaw meet bankers over looming Claude Mythos
India will build a real-time threat-intelligence-sharing system among banks, CERT-In, and other agencies to spot emerging AI-driven cyber risks more quickly, the finance ministry said after a meeting chaired by Nirmala Sitharaman.
Hunting vulnerabilities: Sitharaman and IT minister Ashwini Vaishnaw examined how new AI models could be used to weaponise software flows, following concerns around Anthropic’s Mythos model.
She urged banks to beef up cybersecurity teams, being in specialised external experts where needed, and report suspicious activity or cyber incidents to authorities without delay.
Why it matters: Officials warned that the latest AI models create a new class of threats that demand tighter vigilance, sharper coordination and pre-emptive action. The meeting was attended by the RBI, NPCI and CERT-In, underscoring the gravity of the issue for the financial system.
China's DeepSeek releases new AI model a year after viral rise
China’s DeepSeek has released a new AI model, V4, a year after its viral breakout. The startup has put out a preview version and says the model boosts agents’ capabilities, world knowledge, and reasoning.
New stakes: This launch injects fresh urgency into the China-versus-US AI arms race and follows last year’s DeepSeek shock, when its low-cost model outperformed several marquee US systems.
OpenAI’s latest: Sam Altman’s OpenAI has also rolled out GPT-5.5, described as its smartest model so far for research-oriented tasks, including improving its own models. The company calls it “a new class of intelligence for real work and powering agents.”
Our aim now is to create Indian games for local use and global exports: Krafton CEO Kim
Five years after entering the country with PUBG, Korean gaming publisher Krafton Inc is doubling down on the Indian market.
Krafton’s roadmap: The company plans to broaden its game portfolio, back local developers and step up investments in studios and consumer internet startups to build a larger gaming ecosystem in India.
Quote, unquote: “We want games to be created in India to cater to Indian users. But we also want games made in India to be exported outside, so it can become a global phenomenon,” said CH Kim, chief executive of Krafton Inc, to ET in an exclusive interview.
Fresh capital: Earlier this week, Krafton, alongside fellow South Korean giants Mirae Asset and Naver, launched a Rs 6,000 crore tech-focused fund to invest in early to growth-stage startups.
Backdrop: PUBG Mobile remains banned in India, but Krafton launched Battlegrounds Mobile India in 2021. The title now has about 260 million users and consistently ranks among the country’s three top revenue-generating games.
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I agree to receive newsletters and marketing communications via e-mail