Paytm Shares Nosedive 8% After RBI Revoked Paytm Payments Bank License

Paytm Share Price: The share price of fintech major Paytm nosedived as much as 8% to hit an intra-day low of Rs 1055.25 per share on Monday, April 27 after RBI cancelled the license of Paytm Payments Bank Ltd.

This comes after India's central bank restricting its core business activities. The Bengaluru-headquartered company also witnessed the wiping of nearly Rs 6,000 crore from investor wealth as its market capitalisation fell approximately to Rs 67,500 crore

Why RBI Cancelled Paytm Payments Bank' Licence?

In the previous week, RBI had announced the cancellation of PPBL effective from the close of business hours on Friday over violation of certain rules. The apex bank further noted that Paytm Payments Bank has enough liquidity to repay its entire deposit liability upon winding up.

According to an exchange filing dated April 25, the company noted, “Upon the winding-up order becoming effective, PPBL shall cease to be an associate company of the Company within the meaning of the Companies Act, 2013 and the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.”

The board and shareholders of PPBL have also approved resolutions to enable the winding-up of Paytm Payments Bank.

Meanwhile, RBI in a statement mentioned, “The general character of the management of the bank is prejudicial to the interest of depositors as also the public interest... no useful purpose or public interest would be served by allowing the bank to continue…”

As of 9:57 AM, the share price of Paytm stood 4.35% lower at Rs 1,097 per share.