RBI had taken big action on Paytm shares 2 days ago. On January 31, RBI took major action against Paytm Payments Bank and banned taking deposits after February 29. The decision came on the evening of 31 January and the stock fell by 20% on 1 February. The situation remained the same on 2 February and the stock closed at the lower circuit of 20%.
But what was the reason for this strict action of RBI?
According to information received from sources, bank regulator RBI has found several fundamental shortcomings in the functioning of Paytm Payments Bank. At one place, the work of Know Your Customer (KYC) was not completed properly, due to which concerns increased about threats like money laundering. Along with this, RBI found about 1,000 such users who were registered with the same PAN card.
Such users had made transactions worth crores of rupees, due to which it became necessary for RBI to take strict action against Paytm Payments Bank.
What were the other reasons?
It is important to follow the rules between Paytm Payments Bank and the holding company One 97 Communications.
According to information received from sources, RBI investigation found that financial and non-financial business was done between the holding company One 97 Communications and Paytm Payments Bank. Additionally, a limited distance that should be maintained with the promoters group was also not maintained. As far as data privacy is concerned, due to the transactions done with the parent app, clouds of crisis started looming over data privacy, due to which RBI had to take this strict step.
What were the developments?
31 January
On January 31, RBI issued a notice on Paytm Payments Bank. According to this, after February 29, no user will be able to deposit his money in Paytm Payments Bank. However, its customers will be allowed to withdraw money.
1 February
On February 1, the company held a conference on this issue. The company said that it will enter into an agreement with third party banks on this. He said that we are contacting other banks.
A sales force of 30,000 people is present on the ground to complete the repayment and settlement work before February 29. The company also clarified that the payment gateway will continue to provide payment solutions to existing merchants.
Services of machines like Paytm QR, Paytm Soundbox, Paytm Card will continue as before. For this, the Virtual Payment Address (VPA) of the QR code will be changed to another sponsored bank.
The company said that they are not taking a new loan for the coming few weeks.
2 February
The reasons due to which RBI took action against the company.
Performance of Paytm share?
The issue price of Paytm was Rs 2,150. Today i.e. at the close of trading on Friday, February 2, the share price reached Rs 487.20, which is 77% below the issue price.
Talking about the last 2 days, the market cap of Paytm share has decreased by Rs 9,662 crore on Thursday and by Rs 7,332 crore on Friday.
