New Delhi, February 2, 2024 – By Sunil Chaudhary
Amid concerns over the Reserve Bank of India’s (RBI) restrictions on Paytm Payments Bank, the founder of the popular digital payments app, Vijay Shekhar Sharma, has provided reassurance to its more than 300 million users. He stated that the app will continue to work as usual beyond February 29.
Vijay Shekhar Sharma’s Reassurance Comes as RBI Limits Paytm Payments Bank Operations
The RBI’s recent order has raised questions about the app’s operations. The central bank directed Paytm Payments Bank Ltd (PBBL) not to accept deposits, offer credit services, or facilitate fund transfers starting from March 1. This directive was issued due to “persistent non-compliance” issues highlighted in an external audit.
In response to user concerns, Paytm Payments Bank Ltd (PBBL) affirmed that customer funds are safe and that the RBI’s directive will not affect existing balances. Customers can continue to utilize their account balances, including savings and current accounts, without any restrictions.
However, PBBL also noted that customers will no longer be able to deposit money into their accounts or transfer funds to wallets linked to those accounts after February 29.
The RBI’s actions have resulted in a significant decline in Paytm’s stock price. The stock plummeted from ₹761.4 to ₹609 in a single day, wiping out approximately $1.2 billion in market value. Subsequently, it fell further to ₹487.2, leading analysts to speculate about the potential impact on the operations of Paytm Payments Bank.
Paytm has indicated that it is taking immediate steps to comply with the RBI’s directives but cautioned that there could be a worst-case annual impact of nearly $60 million on earnings.
Paytm, with its UPI (unified payment interface) platform, has played a pivotal role in the adoption of digital payments in India, particularly after the government’s demonetization move in 2016.
The company currently holds a 49% stake in PBBL, with Vijay Shekhar Sharma owning the remaining 51%. Although Paytm went public in Mumbai in November 2021, its shares have faced challenges, declining by over 70% since its initial public offering, primarily due to concerns over profitability and regulatory issues.
For the latest updates and developments on this matter, users are encouraged to refer to official reports and news sources.
Disclaimer: This article is for informational purposes only and should not be considered financial or investment advice. Readers are encouraged to consult with financial experts and official sources for specific guidance
Vijay Shekhar Sharma Addresses Users as RBI Imposes Restrictions on Paytm Payments Bank
In response to mounting concerns regarding the recent restrictions imposed by the Reserve Bank of India (RBI) on Paytm Payments Bank, the founder of the immensely popular digital payments app, Vijay Shekhar Sharma, has moved swiftly to provide reassurance to the app’s massive user base, numbering over 300 million. With utmost confidence, he conveyed that the app will continue to function as usual, extending beyond the pivotal date of February 29.
The RBI’s directive has naturally raised questions and uncertainties surrounding the future operations of the Paytm app, especially its banking services. The central bank has directed Paytm Payments Bank Ltd (PBBL) to cease accepting deposits, halt the provision of credit services, and cease facilitating fund transfers, starting from March 1. This regulatory action was taken in response to “persistent non-compliance” issues brought to light during an external audit.
Paytm Payments Bank Ltd (PBBL) was quick to reassure its customers that their hard-earned money remains absolutely secure. The RBI’s directive will not impact existing balances, and customers can continue to use their account balances, including savings and current accounts, without any restrictions.
However, it is vital to note that customers will no longer have the option to deposit additional funds into their accounts or perform transfers to wallets linked to those accounts, effective from February 29.
The aftermath of the RBI’s actions was evident in the financial markets, with a sharp and significant decline in Paytm’s stock price. The stock plummeted from ₹761.4 to ₹609 in a single trading session, causing a substantial erosion of approximately $1.2 billion in market value. Subsequently, the stock dipped further, reaching ₹487.2. This development has led analysts to ponder the potential implications for the future of Paytm Payments Bank.
While Paytm has affirmed its commitment to promptly adhere to the RBI’s directives, the company has also issued a cautionary note. It suggested that there could be a worst-case scenario involving an annual impact of nearly $60 million on earnings.
Paytm, renowned for its UPI (unified payment interface) platform, has played an instrumental role in spearheading the widespread adoption of digital payments in India, particularly in the wake of the government’s historic demonetization initiative in 2016.
Currently, the company holds a 49% stake in PBBL, with Vijay Shekhar Sharma retaining the remaining 51%. Notably, Paytm successfully went public on the Mumbai stock exchange in November 2021. However, its shares have faced a challenging market, experiencing a decline of over 70% since its initial public offering. This decline can be attributed mainly to concerns surrounding profitability and regulatory matters.
For the most recent developments and updates concerning this matter, users are encouraged to refer to official reports and news sources.
Disclaimer: This article serves solely for informational purposes and should not be regarded as financial or investment advice. Readers are urged to consult with financial experts and official sources for specific guidance