Paytm (One 97 Communications Ltd.) shares witnessed a stark drop of more than 20 per cent in the pre-market opening session on Thursday, after the apex bank, RBI (Reserve Bank of India), imposed operational restrictions on the fintech firm's banking arm, Paytm Payments Bank Ltd.
In response to comprehensive audits and subsequent compliance validation reports by external auditors, the Reserve Bank of India (RBI) had announced on Wednesday, stringent measures for PPBL. These measures included discontinuing the acceptance of new deposits and suspending credit transactions effective from February 29. The decision is rooted in the discovery of persistent non-compliance issues and continued material supervisory concerns within the bank, as outlined in the audit reports.
At 09:35 am, the shares of PPBL were trading at Rs 609 price level, down by nearly 20 per cent or 152 points on NSE.
The central bank stated that after February 29, 2024, no additional deposits, credit transactions, or top-ups will be permitted in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc.
However, customers of the lender are allowed to withdraw or utilize their balances from respective accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., without any limitations, up to the amount available in their accounts.
The fintech firm is facing increasing challenges as last month reports indicated that Paytm's parent company, One 97 Communications, laid off more than 1000 employees. The layoff aimed to reduce staff costs.