Paytm slumps to all-time low after RBI's curbs on payment bank

One 97 Communications (Paytm) slumped 11.98% to Rs 682 after the Reserve Bank of India (RBI) has directed Paytm Payments Bank to stop, with immediate effect, onboarding of new customers.

The stock had tumbled 13.26% in early trade to hit a record low of Rs 672.10 in intraday trade today.

The action by the RBI is based on certain material supervisory concerns" and the restrictions will continue pending a comprehensive audit of its information-technology systems, the central bank said in a statement on Friday.

Onboarding of new customers by Paytm Payments Bank will be subject to specific permission to be granted by the central bank after reviewing the report of the information technology auditors, it added.

In a statement late Saturday, One 97 Communications said that Paytm Payments Bank (PPBL) is taking immediate steps to comply with RBI directions, including appointment of a reputed external auditor to conduct a comprehensive System Audit of its IT systems. PPBL remains committed to working with the regulator to address their concerns as quickly as possible. One 97 Communications is Paytm's parent company.

Paytm Payments Bank is one of the payment instruments of Paytm. Paytm is one the largest payments platform in India based on the number of consumers, number of merchants, number of transactions and revenue ended March 2021. The company launched Paytm in 2009, as a mobile-first digital payments platform to enable cashless payments for customers giving them the power to make payments from their mobile phones. It started with bill payments and mobile top-ups as the first use cases, and Paytm Wallet as the first Paytm Payment Instrument.

One 97 Communications (Paytm) reported a consolidated net loss of Rs 778.50 crore in Q3 December 2021, higher than net loss of Rs 535.50 crore in Q3 December 2020. Consolidated net sales jumped 88.6% to Rs 1,456.10 crore in Q3 December 2021 over Rs 772 crore in Q3 December 2020.

Shares of Paytm listed on the bourses on 18 November 2021 at Rs 1955, representing a discount of 9.07% to the issue price of Rs 2150. It further declined 20% on the same day to close at Rs 1564.15.

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