Paytm shares crack 10%; RBI to issue FAQs in the matter next week

Shares of One97 Communications Ltd (Paytm) hit lower circuit on Thursday after the Reserve Bank of India (RBI) said that action against Paytm Payments Bank, the banking entity of Paytm has been taken for persistence non-compliance, while addressing the media after their MPC outcome.

"We have received a lot of queries over the last few days," said RBI Governor Shaktikanta Das, in response to media queries over the regulatory action against Paytm Payments Bank. "We have noted them down. We will be issuing an FAQ sometime next week based on that."

Shares of One97 Communications, the parent company of Paytm, have been on a free-fall lately, since the beginning of this month. The regulatory hammering has wiped out more than 41 per cent value of the counter in February so far, tumbling to Rs 447.10 from its close at Rs 761 apiece on January 31. The stock was locked in the lower circuit of 10 per cent on Thursday.

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Up To other banks if they want to partner with Paytm Payments Bank, says RBI Deputy Governor Swaminathan J. "It is a business decision for other banks, if they want to partner with Paytm Payments Bank, said DG Swaminathan, while addressing the media. The central lender also clarified that that action is against Paytm Payments Bank and not Paytm App.

To recall, the central bank issued the order directing the banking arm to stop accepting fresh deposits from March onwards which triggered the carnage in the fintech player. The Reserve Bank of India (RBI) has placed significant restrictions on Paytm Payments Bank, prohibiting it from accepting new deposits and conducting credit transactions after February 29

The banking regulator found major irregularities in KYC done by Paytm, which exposed the customers, depositors and wallet holders to serious risks. The RBI found that the same PAN was linked to more than 100 customers and in some cases to up to 1,000 customers in its probe.

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