The shares plunged by their daily limit of 20% each on Thursday and Friday, erasing $2 billion of its market value, after RBI ordered the bank to to stop its popular mobile wallet business along with other activities, citing “persistent non-compliance and supervisory concerns”.
Paytm Payments Bank could lose its operating licence as early as next month after customer deposits are secured. The RBI had on Wednesday ordered Paytm Payments Bank, 49% owned by Paytm’s parent company, to stop its popular mobile wallet business along with other activities, citing “persistent non-compliance and supervisory concerns”.
A Bloomberg report says the regulator could now scrap the bank’s licence after the February 29 deadline when fintech’s banking arm is required to stop customers from replenishing their savings accounts on the popular digital payment wallet.
However, no final decision has been reached and the RBI’s decision could change based on Paytm’s representation, the report added.
Paytm went public with much fanfare in late 2021 but its stock has since slumped more than 70% as investors questioned its profit-making ability and it tussled with regulators.
The shares plunged by their daily limit of 20% each on Thursday and Friday, erasing $2 billion of its market value, after the RBI order.
The proposed move is in response to violations including misuse of customer documentation rules and non-disclosure of material transactions.