GG News Bureau
New Delhi, 9th Feb. One of the well-known fintech companies in the nation, One 97 Communications, also known as Paytm, is seeing a decline in its stock that does not appear to be abating. For the third day in a row, shares of Paytm have decreased. Early trade has seen a 10% decline in the company’s shares. As a result, the company’s market cap has dropped by Rs 20,471.25 crore as a result of the shares’ more than 42% decline over the previous three trading sessions. The RBI’s announcement of a ban on Paytm Payment Bank is noteworthy. Paytm will be closing many of its services as of February 29. In this case, the RBI’s restriction has had an impact on Paytm’s stock price.
Investors lost out on Rs 20,500 Cr
The company’s shares dropped 10% on Monday to trade at Rs 438.35 on the Bombay Stock Exchange (BSE). It dropped 9.99 percent to Rs 438.50 on the National Stock Exchange (NSE) at the same moment. Regarding investors, the Paytm issue has resulted in a loss of Rs 20,500 crore over the course of three trading days. The data indicates that the company’s valuation decreased to Rs 27,838.75 crore today from Rs 30,931.59 crore on Friday. This indicates that the company’s valuation on Monday decreased by Rs 3092.84 crore. However, the company’s valuation dropped by Rs 17378.41 crore on Thursday and Friday. This indicates that in just three days, the company’s valuation dropped by Rs 20,471.25 crore.
What causes the decrease?
The Reserve Bank of India (RBI) has requested that Paytm Payment Bank Limited (PPBL) cease accepting deposits or top-ups in any customer account, wallet, Fastag, and other devices after February 29. This has resulted in a decline in the company’s shares. arrived after issuing directions. The company’s yearly operating profit is predicted to be impacted by this RBI order by a sum of roughly Rs 300–500 crore. Remarkably, One97 Communications Limited regards Paytm Payments Bank Limited as an associate rather than a subsidiary despite owning a 49% stake in the latter. Why did the Paytm Payment Bank face legal action?
Media reports claim that thousands of Paytm Payments Bank accounts did not follow KYC. i.e., the bank was unaware of its clientele. The possibility of fraud and money laundering rises as a result. The report claimed that lakhs of accounts at Paytm Payments Bank Limited (PPBL) lacked KYC. Such instances, where a single PAN card was used to open several accounts, were common. From these accounts, transactions totaling crores of rupees have occurred, exceeding the regulatory limit. This also raises the possibility of money laundering.
Paytm boasts 35 crore e-wallets
About 35 crore e-wallets are held by Paytm Payments Bank, according to the report. About 35 crore e-wallets are held by Paytm Payments Bank, according to the report. Roughly 31 crore of these are not in use. In lakhs of accounts, KYC has not been completed. Moreover, PPBL is charged with providing RBI with inaccurate and deficient information. These accounts have been linked to suspicious transactions. In light of this, the RBI has acted. The Enforcement Directorate will now look into the company if any new allegations surface.
There will be no interruptions to this service
The Paytm Payments Bank is subject to all RBI regulations. Paytm including Paytm QR, Insurance, Loan Disbursement, Soundbox, and Card Machine, among others won’t be impacted as a result. This will have an impact on all businesses associated with Payments Bank. RBI has mandated that Paytm give its users complete access to withdraw and utilize their balance. Customers who use Fast Tag or have current and savings Paytm accounts will also be able to use this service. After February 29, Paytm’s services will all function as usual.