Paytm's stock fell to a six-week low of Rs 609 (Representational)
Shares of fintech company Paytm plunged 20% in pre-open trade on Thursday, a day after the Reserve Bank of India (RBI) announced to halt business at its associate Paytm Payments Bank.
Paytm's stock fell to a six-week low of Rs 609, the news agency Reuters reported.
The RBI on Wednesday directed Paytm Payments Bank that it will not be able to take fresh deposits, facilitate credit transactions, or offer fund transfers, including the Unified Payments Interface (UPI) facility after February 29.
"No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime," the central bank said.
The RBI said it had in March 2022 asked the Paytm Payments Bank to stop onboarding new customers. However, a 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, the RBI said, without disclosing details.
Paytm Likely To Lose Over Rs 500 Crore
Paytm on Thursday said it expects a "worst case impact" of Rs 300 crore to Rs 500 crore to its annual earnings from RBI's order restricting Paytm Payments Bank from accepting fresh deposits.
The company also said it is taking "immediate steps" to comply with the RBI's directions and that it expects to "continue on its trajectory" to improve its profitability.
Nifty, Sensex Open Higher Ahead Of Interim Budget
The Indian markets opened higher on Thursday morning ahead of the announcement of the Interim Budget by Finance Minister Nirmala Sitharaman.
As of 9:20 am, the NSE Nifty 50 was 5.95 points or 0.03% higher at 21,731.65, and the S&P BSE Sensex was 6.75 points or 0.01% up at 71,758.86.