After RBI imposed restrictions on the addition of new customers Paytm Payments Bank On Saturday, the company’s shares have seen a fall of about 70 percent from their all-time high. To add further, the firm’s troubles escalated over the weekend following news that its founder and CEO Vijay Shekhar Sharma He was briefly detained after ramming into the car of a senior police officer in the capital New Delhi last month and fleeing the scene.
One 97 Communications Paytm The stock, which is now valued at less than a third of its initial offer price, fell to an all-time low on Monday, eventually closing 13 per cent lower at Rs 674.80 on the National Stock Exchange. It declined further by 7.12 per cent in early trade on Tuesday and is currently trading at Rs 627.75.
Today is the second day when the shares of Paytm continue to fall after the RBI ban. Currently, the stock is trading 68 per cent down from its all-time high of 1961.05, while the stock is down nearly 50 per cent on a year-on-year basis. The company has lost over Rs 89,185 crore in market capitalization since the IPO.
RBI puts on hold customer acquisition for Paytm Payments Bank
The Reserve Bank of India (RBI) on Saturday directed Paytm Payments Bank to stop new customers with immediate effect, citing “material supervisory concerns observed in the bank”.
The Reserve Bank of India said in a statement that the bank has also been directed to appoint an audit firm to conduct a comprehensive audit of its IT system.
This is the second time that Paytm is facing a regulatory ban. In June 2018, RBI had made some comments regarding the procedures followed by the company for acquiring new users, especially with regard to Know Your Customer (KYC) norms.
Paytm on RBI ban
Responding to the regulatory action taken by the central bank, a Paytm Payments Bank spokesperson said, “The bank is taking immediate steps with regard to the decision of RBI. PPBL is committed to work with the regulator to address their concerns at the earliest. Existing customers of PPBL can continue to avail seamless banking and digital payment services without any interruption. The savings of existing users in PPBL account, their fixed deposits with partner banks, and balance maintained in their Paytm Wallet, FASTag or Wallet Card and UPI services are fully secure and functional.
Paytm report alleges China link
News agency Bloomberg had reported that the RBI or Reserve Bank of India had found the company’s servers sharing information with China-based entities that indirectly hold stake in Paytm Payments Bank.
The annual inspection by the Reserve Bank of India found that the company’s servers were sharing information with China-based entities that indirectly hold stake in Paytm Payments Bank, Bloomberg said, citing sources.
Paytm on data leak
However, the company denied this on Monday. “Paytm Payments Bank is proud to be a fully domestic bank, which is fully compliant with RBI directives on data localization. All bank data resides within India,” the company said.
Will RBI punish Paytm?
According to an ET report, the RBI will set the terms of reference for an independent technology audit of Paytm Payments Bank after the regulator banned onboarding of new customers for alleged violations of customer acquisition and privacy norms, including Possible data flow could be involved. of Chinese origin.
In the next few days, Paytm Payments Bank will submit several names as potential audit candidates to the regulator for approval, and the regulator may finalize the terms of reference based on its findings that include multiple lapses in Know Your Customer. (KYC) norms, ET said citing sources.
Paytm Payments Bank is a joint venture between Paytm and Sharma. According to exchange filings, China’s Alibaba Group Holding Ltd and its affiliate, Jack Ma’s Ant Group company, are shares of Paytm.
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