RBI may cancel operating license of Paytm Payments Bank: The Reserve Bank of India (RBI) has stopped providing banking services to Paytm. Now Paytm Payments Bank may also lose its operating license early next month. That means Paytm will not be able to manage the banking service.
RBI has made Paytm Payments Bank mandatory
On Wednesday, the RBI ordered Paytm Payments Bank, which holds 49 per cent stake in Paytm’s parent company, to shut down its mobile wallet business as well as other activities for non-compliance. RBI has ordered that after February 29, activities related to Paytm Payments Bank will be stopped. RBI further said that customers should not deposit money in Paytm wallet and Payments Bank accounts. However, customers can withdraw the deposited amount. As soon as this news came on Wednesday, Paytm shares fell by a record 20 percent on both Thursday and Friday.
Banking license can be canceled
A Bloomberg report said the central bank may revoke banking licenses after the February 29 deadline. This means that you will not be able to deposit any new amount into your Paytm Payments Bank account. Also, money will not be able to be deposited in the wallet. However, if your money is already deposited then it can be withdrawn. The report further said that no final decision has been taken and the RBI decision may change depending on Paytm’s submission.
Paytm suffered huge loss
Paytm launched its IPO in late 2021, but its stock has fallen more than 70 percent since then. Also, in the last two days, Paytm shares have fallen by more than 40 percent. Due to this, its market cap has decreased by 2 billion dollars. It is noteworthy that RBI has taken this action for not following the rules of Paytm. Even before this, RBI had warned Paytm Payment Bank several times. The bank was adding customers without proper customer information documents for a long time. Apart from this, money transactions were also exceeding the limit.