Indian payments giant Paytm has experienced a 20% decline in its share price for the second consecutive day, resulting in a loss of approximately $2 billion in market value. This downturn follows the Reserve Bank of India’s (RBI) implementation of strict restrictions on its banking operations.
On Friday, Paytm’s shares fell to 487 rupees shortly after the market opened, leading to a trading halt for the second day in a row. Earlier this week, the RBI announced that starting at the end of February, Paytm Payments Bank will be prohibited from accepting new deposits, engaging in credit transactions, allowing wallet uploads, or processing fund transfers. This restriction will impact millions of customers who rely on the app’s services unless a new banking partner is established.
The RBI’s actions were prompted by a thorough systems audit, which identified “persistent non-compliances and continued material supervisory concerns” within the bank, necessitating further regulatory measures.
In response, Paytm CEO Vijay Shekhar Sharma has sought to reassure customers and investors, stating that securing new banking partnerships will “not be difficult to execute.” He emphasized that “your favorite app is working and will continue to work beyond 29 February as usual.” Sharma further committed to finding solutions for every challenge, reiterating the company’s dedication to serving its customers in full compliance with regulations.
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