Paytm Falls 13% and Reaches a New Low as the RBI Prohibits Paytm PB from Soliciting New Customers

In Monday’s intra-day trade on the BSE, a shareholder of One97 Communications, the parent organization of digital payments giant Paytm, fell sharply 14% to a new depth of Rs 672 post the Reserve Bank of India (RBI) barred Paytm Payments Bank (PPBL) from onboarding fresh clients with immediate impact due to supervising concerns.

The stock is trading at a discount to its previous low of Rs 728.50, which was set on March 8, 2022. But compared to its issue price of Rs 2,150, the stock now has dropped by 69%. On November 18, 2021, the business moved public for the first time.

Stock trade

The stock was trading at Rs 693 at 10:55 a.m., down 10.5 percent, with about 300,000 shares traded on the BSE so far.

Paytm PB has been ordered by the banking regulator to hire an IT audit company to perform a full system audit on its IT system. Based on a comprehensive audit review, Paytm PB would need particular clearance from the RBI to resume customer onboarding. Paytm claimed that PPBL would take immediate efforts to comply with RBI instructions. It was planning to recruit a reputable external auditor to perform a full systems audit for its IT infrastructure.

Company’s bearing

The company stated that the RBI directive has no bearing on current PPBL clients, who can continue to use all banking and payment services as usual. All current Paytm UPI, Paytm FASTag, Paytm Pockets, and bank account clients can continue to use these devices and debit playing cards plus web banking to make payments in an exchange submitting.

This course has no bearing on the services that Paytm provides in collaboration with other financial institutions. The company stated that they remain focused on developing digital funds and monetary services to promote monetary inclusion within India.

The limitation on buyer acquisition will stymie Paytm PB’s business expansion efforts to bring in half a billion new customers. According to ICICI Securities, this ban might hurt onboarding new customers for financial savings, pockets, and current accounts. Furthermore, according to the brokerage firm, it could postpone PPBL’s goal to convert into a small finance banking institution.