Business
Paytm shares tanks 13 pc after RBI imposes curbs on payments bank
Shares of One97 Communications, the parent company of Paytm, plunged nearly 14 per cent to hit a new low of Rs 672 on the BSE in Monday’s intra-day trade.
The sharp drop in the price came on the back of Reserve Bank of India’s move to bar Paytm Payments Bank from onboarding new customers. The stock had hit its all time low on March 8, Tuesday Rs 728.50 and now it has declined 69 per cent when compared with its issue price of Rs 2,150. The fintech firm has seen an erosion of over ₹ 57,100 crore to ₹ 44,294 crore from from Day 1’s closing market capitalisation of ₹ 1,01,399.72 crore As of 11:18 am, the digital payment service was trading at Rs 692 per share.The company made its market debut on November 18, 2021.
The central bank had cited “material supervisory concerns observed in the bank” for its actions. Further, RBI has also directed the bank to appoint an audit firm to conduct a comprehensive audit of its IT system.
A press release said, “action against Paytm Payments Bank Ltd under section 35 A of the Banking Regulation Act, 1949. The RBI has today, in exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers.”
Also Read: RBI bars Paytm Payments Bank from onboarding new customers
“The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors. This action is based on certain material supervisory concerns observed in the bank,” the press note added.
This is not the first time that Paytm has invited the banking regulator’s ire. In October, RBI fined PPBL Rs 1 crore for submitting information which did not reflect the factual position while applying for its final certificate of authorisation.