Paytm stock falls 3% amid speculations over Paytm Payments Bank’s licence

Shares of Paytm fell 3 percent in morning deals on March 4 amid reports that with less than two weeks to go for Paytm Payments Bank Limited (PPBL) to cease operations, the Reserve Bank of India (RBI) may take the unprecedented step of revoking its banking licence.

If the RBI ends up revoking PPBL’s licence, it would be the first time in over two decades that the banking regulator would take such an action.

The RBI, on January 31, imposed business restrictions on Paytm Payments Bank, including a bar on accepting fresh deposits and doing credit transactions after March 15. The regulator found major irregularities in KYC, which exposed the customers, depositors and wallet holders to serious risks. The stock has taken a steep hit since the RBI crackdown.

At 9:46 am, Paytm stock was trading at Rs 406.90 on the National Stock Exchange (NSE), down 1.8 percent from the previous close.

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While Paytm is trading 27 percent above the 52-week low of Rs 318 hit on February 16, the fintech stock is still around 46 percent below the January 31 closing price of Rs 761.20.

In the week gone by, Financial Intelligence Unit-India imposed a penalty of Rs 5.49 crore on Paytm Payments Bank for violating money-laundering norms. In a statement, the company said: “The penalty pertains to issues within a business segment that was discontinued two years ago. Following that period, the bank has enhanced its monitoring systems and reporting mechanisms to the Financial Intelligence Unit (FIU).”

This announcement came after Paytm’s board announced the discontinuation of several inter-company agreements with Paytm Payments Bank.

Earlier on February 26, Vijay Shekhar Sharma resigned from the Board of Paytm Payments Bank to “enable the reconstitution of the board, OCL informed the bourses”. The company is now in the process of appointing a new chairman.

Also Read | Paytm Payments Bank may lose licence

Several brokerages have either downgraded Paytm stock or cut the target price after the RBI action. Jefferies has discontinued its rating on Paytm and has moved the counter to its list of ‘Non Rated’ stocks.

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