Paytm shares tank 4% as RBI asks to reapply for payment aggregator licence, recover

Shares of One97 Communications (Paytm) fell over 4 per cent in Monday's trade after the banking regulator RBI stopped onboarding of online merchants by Paytm Payments Services (PPSL), even as the company insists it would have no material impact on its business.

The stock fell 4.39 per cent to hit a low of Rs 444.35 on BSE. Later, the scrip recovered some lost ground and was trading 0.7 per cent lower at Rs 461.55.

"Our 100 per cent subsidiary, Paytm Payments Services, is in receipt of a letter from Reserve Bank of India in response to an application from PPSL for the authorisation to provide payment aggregator  services for online merchants," Paytm told BSE adding that PPSL is required to take a few steps and resubmit the PA application within 120 calendar days, as per the letter.

Paytm has been asked to seek necessary approval for past downward investment from the company in to PPSL. It has been asked to comply with FDI guidelines and not to onboard new online merchants. The company, however, clarified that there are "no material observations other than what is mentioned above."

It added that the development will have no material impact on  its business and revenues, since the communication from RBI is applicable only to onboarding of new online merchants.

"We can continue to onboard new offline merchants and offer them payment services including All-in-One  QR, Soundbox, Card Machines, etc," it noted.

Paytm said PPSL can continue to do business with existing online merchants, for whom the services will remain unaffected. It said it is hopeful of receiving the necessary approvals in a timely manner and resubmitting the application.

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