Paytm share price witnessed strong selling pressure as the stock hit its 20 per cent lower circuit for the second consecutive session today. The share price opened at its 20 per cent lower circuit at ₹487.05 against the previous close of ₹608.80 on the BSE. In the last session, Paytm share price cracked 20 per cent as well after Reserve Bank of India’s (RBI) action on Paytm Payments Bank (PPBL).
The Reserve Bank of India (RBI) on January 31 imposed restrictions on Paytm Payments Bank. This action was taken after a system audit report and subsequent compliance validation report of external auditors.
Paytm Payments Bank was barred by the RBI from accepting deposits or top-ups in any customer account, wallets or FASTags after February 29. The RBI cited section 35A of the Banking Regulation Act, 1949 and mentioned that the Nodal Accounts of One97 Communications and Paytm Payments Services Ltd. are to be terminated at the earliest.
Paytm said that it will take steps immediately to comply with the RBI’s directions on Paytm Payments Bank. The company expects to have a worst-case impact of ₹300 to 500 crores on its annual EBITDA going forward, it said. Paytm added that it expects to continue on its trajectory to improve its profitability.
One 97 Communications (OCL), the parent of Paytm, in an exchange filing, said it will partner with other banks and not with Paytm Payments Bank (PPBL).
“OCL has already been working with other banks for the last two years. We will now accelerate the plans and completely move to other bank partners. Going forward, Paytm will be working only with other banks, and not with PPBL,” the company said, adding, “With regard to the direction on termination of the nodal account of OCL and Paytm Payments Services Limited (PPSL) by February 29, 2024, OCL and PPSL are in the process of moving the nodal account to other large commercial banks.”