Shares of One 97 Communications Ltd, the parent company of Paytm, experienced a sharp decline of 8% in early trading today. This significant drop came swiftly after the Reserve Bank of India (RBI) announced on April 24 that it had canceled the banking license of Paytm Payments Bank Ltd (PPBL), an associate entity.
The immediate market reaction led to a loss of ₹5,879 crore for Paytm shareholders within minutes of the market opening. The Paytm stock fell by ₹92, settling at ₹1055.25 compared to its previous close of ₹1147.10. Consequently, the company's market capitalization on the BSE dipped to ₹67,546 crore.
RBI Cites 'Detrimental' Conduct
The Reserve Bank of India justified its stringent action by stating that PPBL's operations were conducted in a manner deemed "detrimental to the interest of the bank and its depositors." This is not the first regulatory intervention concerning Paytm Payments Bank.
- In March 2022, the RBI had initially barred the bank from onboarding any new customers.
- Further severe business restrictions were imposed in January and February 2024, which disallowed new deposits or credit transactions into customer accounts.
Paytm's Response to Regulatory Action
Despite the significant market impact, Paytm issued a clarification to the stock exchanges, asserting that the regulatory action against PPBL would not disrupt its broader operations or business activities. The company aims to reassure investors that its core services remain unaffected.
The trading session saw a total of 3.14 lakh shares of the firm change hands, amounting to a turnover of ₹33.65 crore, reflecting the intense investor activity following the RBI's directive.