Updated February 14th, 2024 at 10:10 IST

Paytm stock plummets 9% as loan restart deadline ends today

In the December quarter, Paytm facilitated loans worth Rs 15,535 crore, encompassing merchant loans, personal loans, and postpaid loans.

Reported by: Business Desk
पेटीएम ऐप | Image:Shutterstock
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Paytm loan operations: The shares of Paytm parent One97 Communications witnessed a sharp decline of 9.48 per cent to a day low of Rs 344.10 apiece on the NSE today, reaching an intraday low of Rs 344.10. This comes amid the likelihood that Paytm's loan operations may be halted as the tentative timeline for the fintech major to restart loan sanctioning ends today, February 14, 2024.

One97 Communications President and Chief Operating Officer Bhavesh Gupta in a company conference call on February 1 had said that the company will not be issuing new loans for "maybe a couple of weeks" before resolving operational challenges posed due to RBI restriction on Paytm Payments Bank Limited (PPBL), reported news agency PTI.

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RBI restrictions impact merchants

The central bank's directive prohibiting PPBL from accepting new deposits or top-ups has posed a significant hurdle for Paytm's lending business. While the two entities operate independently, an estimated 10-15 per cent of Paytm's merchants (around 60,000-70,000) have autopay mandates linked to their PPBL accounts. This necessitates the migration of repayment channels to other banks to ensure smooth operations.

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Impact on business

In the December quarter, Paytm facilitated loans worth Rs 15,535 crore, encompassing merchant loans, personal loans, and postpaid loans. The total number of unique loan borrowers on the platform also grew by 4.4 million year-on-year to 12.5 million. The current disruption poses a potential threat to this growth momentum.

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Published February 14th, 2024 at 10:10 IST