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Updated February 2nd, 2024 at 12:59 IST

Paytm shares fall 40% in two sessions after RBI's clampdown

This marks the second consecutive lower circuit for Paytm stocks, which means that the stock fell by its daily maximum limit.

Anirudh Trivedi
Paytm
Paytm | Image:Republic Business
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Paytm shares plunge: The shares of Paytm’s parent company, One 97 Communications Ltd.,  fell 20 per cent for the second straight session as investors rushed to dump shares of the digital payment firm after the Reserve Bank of India put severe restrictions on its Paytm Payments Bank. This marks the second consecutive lower circuit for the stock which means that the stock fell by its daily maximum limit and no further selling is possible today. 

On Wednesday, the RBI barred Paytm Payments Bank from deposits, credit transactions and top-ups on the platform. The announcement follows the central bank's restrictions for onboarding new customers starting March 11, 2022.

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In the notification on Wednesday, RBI said, “No further deposits, credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashback, or refunds which may be credited anytime.”

The announcement is likely to affect 30 crore wallet holders and 3 crore bank accounts. The company had registered 5 crore account holders in 2019.

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The action comes after RBI took cognisance of Paytm not complying with the 2022 directive, as per a “Comprehensive System Audit report” followed by a compliance validation report of external auditors.

Any transactions such as withdrawal or using available balance will be permitted up to the balance available, the bank further mandated, adding that accounts include savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc.

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The bank will also lose the right to provide UPI (Unified Payments Interface), fund transfers including AEPS and IMPS as well as the Bharat Bill Payment Operating Unit (BBPOU) on the last day of February.  

“The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than February 29, 2024,” RBI further mandated.

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Paytm will not turn a net profit until 2026, one year later than previously assumed, and its earnings that year will be 65 per cent lower than previously estimated, as per a report by brokerage firm Jefferies.

The market capitalisation of the company currently stands at Rs 30,931 crore. At 9:39 am, the shares of the company were priced at Rs 487.05 apiece.

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Published February 2nd, 2024 at 10:06 IST

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