Shares of One97 Communications Ltd, the parent company of the Paytm brand, recorded a further 20% decline on February 2, following the Reserve Bank of India’s (RBI) directive to Paytm Payments Bank Ltd (PPBL) to cease accepting deposits or top-ups in customer accounts, wallets, FASTags, and other instruments after February 29.
The stock experienced a 20% drop to ₹487.05 on the BSE, reaching its lowest trading limit for the day. On the NSE, it plummeted by 20% to ₹487.20. This decline continued from the previous day when shares of One97 Communications fell by 20%.
Over this two-day period, the company’s market capitalization eroded by ₹17,378.41 crore, reaching ₹30,931.59 crore.
The impact of the RBI directive on Paytm’s annual operational profit is estimated to be ₹300-500 crore. Customers will no longer be able to add money to their wallets, FASTags, etc., as PPBL is barred from accepting deposits or top-ups in any customer account after February 29, 2024.
While the directive affects Paytm’s financial operations, customers are allowed to add and withdraw money from the Paytm wallet and PPBL account until the specified date.
The RBI took action against PPBL based on a comprehensive system audit report and subsequent compliance validation report by external auditors.
Despite the challenges posed by regulatory intervention, customers can continue using Paytm services until the specified deadline, and Paytm is assessing the implications on its financial services in response to the central bank’s directives.
