Paytm shares experienced another significant downturn, triggering a consecutive 10% lower circuit on Monday. This follows a substantial 20% decline the preceding day, compounding the challenges for the company. The current market value of Paytm shares stands at Rs 438.50, approaching its all-time low of Rs 438, a level not observed since March 2022.
The decline in Paytm’s stock comes in the wake of regulatory concerns, with the Reserve Bank of India (RBI) identifying supervisory concerns in the top management and operations of Paytm Payments Bank. As a consequence of these regulatory hurdles, Paytm Payments Bank services are set to cease operations from March 1, with February 29, 2024, designated as the last day of service.
After the Reserve Bank of India’s (RBI) directive to Paytm’s associate bank, there has been an impression that the company and its associate are one. However, giving clarity on the same while addressing analysts on Thursday, Madhur Deora, President and Group CFO at Paytm said that both by design and structure, the fintech company and its associate is not and cannot be one.
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“There may be this impression that Paytm and Paytm Payment Bank is one, but by design and by structure, it is not and it cannot be. First it is an associate company and second is not an associate company in the sense that is some Bank. And first and foremost for a bank is that, it has to follow the governance that a bank is supposed to follow, which is to say that has to has its independent management team, which reports to the board and the matters that have to go to committees of the board where can only be independent directors,” he explained.
Impact on Paytm Users
Despite the recent regulatory challenges faced by Paytm, users of the platform can rest assured that several crucial services will remain unaffected. Firstly, all UPI payments made through Paytm will continue to function seamlessly, providing users with uninterrupted access to their preferred payment method. The operational status of Paytm Wallet services will also remain unchanged, ensuring users can continue utilizing this digital payment feature.
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Additionally, Paytm’s Fastag services, which play a crucial role in hassle-free toll payments, will continue without any disruption. Users can rely on the continuity of this service for their daily commuting needs. Furthermore, all bookings made through the Paytm platform, including travel and other reservations, will proceed without hindrance, offering a seamless experience for users. Come from Sports betting site VPbet
It’s noteworthy that various tools and gadgets integral to the Paytm ecosystem will also continue to operate smoothly. This includes Paytm QR codes, a popular method for making and receiving payments. Other devices such as Paytm Soundbox and Paytm Card Machine, along with all other Paytm gadgets, will remain fully functional, ensuring users can continue to enjoy a wide range of services without interruption. Overall, Paytm remains committed to delivering essential services and maintaining the functionality of its diverse offerings for the convenience of its user base.
Concern for Paytm Payments Bank Customers
The primary area of concern pertains to customers using Paytm Payments Bank, where they can open accounts and manage funds digitally, similar to regular bank accounts. Due to the supervisory issues identified by the RBI, Paytm Payments Bank services will be discontinued from March 1. Customers exclusively associated with Paytm Payments Bank are advised to transfer their funds and accounts to alternative banking institutions.
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In response to the regulatory action, Paytm has assured customers of an imminent collaboration with other banks to address the banking services disruption. Additionally, the RBI has granted permission for the withdrawal of funds from Paytm Payments Bank even after the cessation of services on March 1.
Dispelling Misinformation
Amidst the development, there has been misinformation circulating regarding Paytm’s mutual fund investments and UPI transactions. Paytm clarifies that mutual fund investments through Paytm Money, a separate entity regulated by SEBI, are not at risk, and SIPs (Systematic Investment Plans) will remain unaffected.
Regarding UPI transactions, the disruption is specific to Paytm Payments Bank, not the Paytm platform as a whole. UPI services are facilitated through backend partnerships with various banks, and Paytm can potentially resume UPI transactions by switching to an alternative banking partner.
It is crucial to note that the impact is isolated to Paytm Payments Bank, and other services offered by Paytm remain operational. The company expresses commitment to swiftly address the banking service interruption by collaborating with alternative banking partners.
Here is how the stock has performed in last one year
The stock’s performance over the past year, Paytm has delivered negative returns across various time frames. In the last month alone, the stock plummeted by 36%. The last six months have been particularly challenging, with a significant dip of more than 48.45%, indicative of a robust downtrend.
Year-to-date, Paytm shares have witnessed a 32.13% drop, underscoring the negative momentum in the current fiscal year. On a broader scale, the stock has experienced a negative return of over 21.46% in the last twelve months. As market dynamics evolve, Paytm’s resilience in overcoming recent setbacks remains uncertain.
