Paytm hits 52-week low after RBI directs company associate Paytm Payments Bank to temporarily halt onboarding of new customers

14 Mar 2022 , 10:08 AM

One 97 Communications Limited (Paytm) updated the exchanges that it has been informed by its associate, Paytm Payments Bank Limited (PPBL), that the Reserve Bank of India (RBI) has directed PPBL to temporarily halt onboarding of new customers, via a letter dated March 11, 2022.

RBI has observed certain material supervisory concerns at PPBL. The bank is taking immediate steps to comply with RBI directions, including appointment of a reputed external auditor to conduct a comprehensive System Audit of its IT systems.

The company stock was under pressure on Monday and at around 10.14 AM, One 97 Communications Ltd (Paytm) was trading at Rs686.90 per piece down by Rs87.9 or 11.34% from its previous closing of Rs774.80 per piece on the BSE. The scrip opened at Rs684 and has touched a 52-week low of  Rs672.10 during early trade on Monday.

“PPBL remains committed to working with the regulator to address their concerns as quickly as possible,” company said.

The Company has been informed that this does not impact any existing customers of PPBL, who can continue to use all banking and payment services without interruption. All existing users of Paytm UPI, Paytm Wallet, Paytm FASTag, and bank accounts can continue to use these instruments, including debit cards and net banking, for payments.

New users can also sign up on the Paytm app, and transact by
a) creating UPI handles and linking them to their bank accounts, or
b) by using third-party payment instruments, for transactions on the Paytm app.

Users can not, until further notice, sign up for new PPBL wallets or PPBL savings or current accounts. Paytm believes that the measures imposed upon PPBL will not materially impact Paytm’s overall business.
This direction does not have an impact on the services that Paytm provides in partnership with other financial services institutions.

“We remain focused on expanding digital payments and financial services to promote financial inclusion in India,” company said.