Paytm Shares Slump 20 Percent After RBI Imposes Restrictions, Internet Goes Berserk
In the aftermath of RBI imposing restrictions on Paytm Payments Bank, shares of One97 Communications Ltd, which owns Paytm brand, plummeted 20 percent.?The stock crashed 20 per cent to Rs 608.80 -- its lower circuit limit -- on the BSE.
At the NSE, it tumbled 19.99 per cent to hit the lowest trading permissible limit for the day of Rs 609.?
The company's market capitalisation (mcap) also eroded by Rs 9,646.31 crore to Rs 38,663.69 crore in early trade.?However, any interest, cashbacks, or refunds may be credited back to customers anytime.
RBI also said the 'nodal accounts' of One97 Communications Ltd (OCL) and Paytm Payments Services are to be terminated at the earliest, in any case not later than February 29, 2024.
OCL, which owns Paytm brand, holds a 49 per cent stake in PPBL but classifies it as an associate of the company and not as a subsidiary.
The RBI's order will have an impact of Rs 300-500 crore on annual operational profit of the company.
"Depending on the nature of the resolution, the company expects this action to have a worst case impact of Rs 300-500 crore on its annual EBITDA going forward. However, the company expects to continue on its trajectory to improve its profitability," Paytm said in a regulatory filing.
Why Did RBI Take This Strict Action?
As per RBI, it had asked the Paytm Payments Bank to stop adding new customers in March 2022.?
The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.
This action has been taken by the central bank under Section 35A of the Banking Regulation Act, 1949.
This Entire Fiasco Has Led To Internet¡¯s Meltdown
People have taken to twitter to share their views on the same and the results are hilarious. While some are sympathizing with the investors, others are indulging in discussions over what led to this.?
Check out some of the reactions right here:
(With agency inputs)
