For past 2 days i.e. on 01st Feb 2024 and 2nd Feb 2024 Paytm hits lower circuit on stock exchange. As per the report main reason behind this drastic fall in Paytm Share Price is the RBI restrictions on one of the Paytm associate named as Paytm Payments Bank Limited (PPBL). In just 2 days Paytm Stock price tank from 753.10 to 487.20 as soon as the report came out in public.
As per the reports Paytm is involve in Money Laundering and irregularities in following KYC policies as stated by Central Bank of India which leads to drastic fall in share price of Paytm.
On 31-January-2024 The Confederation of All India Traders (CAIT) has issued an advisory to Paytm Payments Bank (Paytm Payments Bank Ltd – PPBL) users across the country to switch from Paytm to other payment options.
The Reserve Bank of India (RBI) has also imposed certain restrictions including taking further deposits, conducting credit transactions and carrying out top-ups on any customer accounts, prepaid instruments, wallets etc. on Paytm Payments Bank and advised users to take proactive measures to protect their funds and ensure uninterrupted financial transactions.
As per the reports coming, major reasons for the ban on Paytm Payment Bank was the creation of millions of accounts without proper identification. Process of Know Your Customer (KYC) was also not completed for these accounts. Further, transactions involving millions of rupees were conducted without proper identification, which is raising concerns about money laundering which will be disclosed later after proper investigation.
The ED will probe Paytm Payments Bank, which has been told to wind up its operations by 29-February-2024, if any evidence of illegal activity is found, Revenue Secretary Sanjay Malhotra was cited as saying. Few sources claimed that multiple accounts at Paytm Payments Bank were linked to the same identification proof and that transactions in those accounts ran into crores. An “unusually” high number of dormant accounts had also been found as per the report.
Due to ban on Paytm Payment Bank large numbers of small traders, vendors, hawkers who were making transactions through Paytm Payment Bank will be disrupted along with that the share price of Paytm also got highly impacted.
Meanwhile, Paytm Payment Bank has denied money laundering allegations.
Paytm’s founder, Vijay Shekhar Sharma, characterised the RBI’s actions as a “speed bump” during a conference call with analysts.
He also noted that the app is working and will continue to work after February 29 as the RBI directive will affect only the Paytm Payments Bank.
Let’s a take a look, what Paytm founder Mr. Vijay Shekhar Sharma said in his twitter account (currently known as “X”).
Twitter Handle of Paytm Founder Mr. Vijay Shekhar Sharma: https://x.com/vijayshekhar?s=20
Paytm Payments Bank Limited, an associate of Paytm receives RBI directions. Paytm to expand its existing relationships with leading third-party banks to distribute payments and financial services products. For Reading more click here: https://www.bseindia.com/xml-data/corpfiling/AttachLive/02a4a3a1-8cc0-4cde-a35f-d4f70ca98377.pdf
As the RBI restricted mostly transactions on Paytm Payment Bank which causes Share Price of Paytm on NSE which was traded at 753.10 on 31-January-2023 has drastically fallen by approx. 35% and closed at Rs. 487.20 on 02-Feb-2023.
It is also to be noted that Paytm got listed on the NSE at a price of Rs. 1,950 a discount of -9.3% on the issue price of Rs. 2,150, on 18-Nov-2021.
Since its listing Paytm has never crossed its listing price of Rs. 1,950 and hit lower price of Rs. 438.35 in November’2022, and after this current news burst regarding irregularities in Paytm Payment Bank, share price of Paytm came to Rs. 487.20 which is nearly its all-time lower price. Overall performance of Paytm on NSE was not good at all through out its listing till date.
Below is the monthly chart of Paytm:
On 16-February-2024 RBI extended deadline on Paytm Payments Bank Ltd (PPBL )upto 15th March, 2024 and issued FAQs for its cutomers, to know more about all the FAQs and its deadline extension, click here.
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