Paytm President and Chief Operating Officer Bhavesh Gupta indicated a temporary halt in issuing new loans to address operational challenges stemming from RBI restrictions on Paytm Payments Bank.
On the BSE, the stock fell by 7.50 per cent to reach Rs 390.90 per share, while on the NSE, it declined by 7.28 per cent to Rs 391.45 per share.
Reserve Bank of India Governor Shaktikanta Das said there was "hardly any room" to review the action taken against Paytm Payments Bank.
In November 2020, PPSL had applied for a licence with the Reserve Bank of India (RBI) to operate as a payment aggregator under the guidelines on Regulation of Payment Aggregators and Payment Gateways.
This comes after the RBI on January 31 directed the Paytm Payments Bank to stop accepting deposits or top-ups in customer accounts, wallets, FASTags and other instruments after February 29.
This comes amid the RBI's order, which directed the bank to cease accepting deposits or top-ups in various customer accounts and instruments after February 29.
RBI has put curbs on Paytm Payments Bank for accepting new deposits, credit transactions, or top-ups in customer accounts, prepaid instruments, wallets, FASTags, and more from February 29 onwards.
Joshi said that the reserve bank must have taken the action in the overall interest of the consumer and the economy.
Shares of One97 Communications opened at Rs 461.30, surpassing the previous day's closing price of Rs 451.60.
Since the Reserve Bank of India's directive, reportedly, there has been a surge in downloads of competitor apps, such as PhonePe and BHIM, while Paytm's downloads have declined.
The Reserve Bank of India issued a directive on January 31, which mandated an immediate halt to the onboarding of new customers by Paytm Payments Bank and called for a cessation of its key banking services post-February 29.
The stock plummeted by over 42 per cent over the past three days, resulting in a loss of Rs 20,471.25 crore in market valuation.
Paytm is actively collaborating with other banks to implement necessary changes in the backend for the continuity of its services.
The development comes amid speculations over the company’s operations following Reserve Bank of India’s action against its associate Paytm Payments Bank. The Payments bank was asked to stop key operations from March 1 due to non-compliance.
The central bank's directive restricts Paytm Payments Bank from accepting deposits or top-ups after February 29.
The RBI had raised concerns about the creation of several accounts at Paytm Payments Bank without proper identification, suspecting potential money laundering activities.
Paytm Payments Bank: The central bank has ordered Paytm Payments Bank Ltd to halt most of its business including taking further deposits, conducting credit transactions and carrying out top-ups on any customer accounts, prepaid instruments, wallets, and cards for paying road tolls after Feb 29
Paytm Payments Bank: Sources said RBI in 2021 detected serious KYC Anti Money Laundering violations and the bank was directed to address these deficiencies. However, they continued to persist. The compliances submitted by the bank were found to be incomplete and false on many occasions.
The RBI imposed restrictions, prohibiting the bank from accepting new deposits or conducting credit transactions after February 29.
Vijay Shekhar Sharma stated in a blog post that Paytm's app will continue to function normally beyond February 29 for existing users to withdraw funds.
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