Shares of One97 Communications, the parent company of digital payments major Paytm, tanked as much as 13 per cent to hit a new low of Rs 677 on the BSE in Monday’s intra-day trade after the Reserve Bank of India (RBI) barred Paytm Payments Bank (PPBL) from onboarding new customers with immediate effect because of certain supervisory concerns.
The stock feel below its previous low of Rs 728.50 touched on March 8, 2022. The stock has now declined 69 per cent when compared with its issue price of Rs 2,150. The company made its market debut on November 18, 2021.
Furthermore, the banking regulator has directed Paytm PB to appoint an IT audit firm for conducting a comprehensive system audit of its IT system. Paytm PB will need specific permission from the RBI to restart the onboarding of customers following a review of the audit. Paytm has said that, PPBL, was taking immediate steps to comply with RBI directions and was looking to appoint a reputed external auditor to conduct a comprehensive systems audit of its IT systems.
The company said the RBI order does not impact any existing customers of PPBL, who can continue to use all banking and payment services without interruption. All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag, and bank accounts can continue to use these instruments, including debit cards and net banking, for payments, in an exchange filing.
This direction does not have an impact on the services that Paytm provides in partnership with other financial services institutions. We remain focused on expanding digital payments and financial services to promote financial inclusion in India, the company said. CLICK HERE FOR FULL STATEMENT
ICICI Securities believe this embargo will have adverse impact on onboarding new customers for wallet, savings/current account. The ban on customer acquisition shall cripple business growth for Paytm PB, which is targeting to add half a billion customers to its fold. Also, it may defer PPBL’s plan to apply for conversion into small finance bank, the brokerage firm said in a note.
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