Paytm Shares Plummet 10% Amid Regulatory Crisis and Money Laundering Allegations

6 Feb 2024 , 01:28 AM

Shares of Paytm fell by 10% at ₹438.35 on BSE amid a deepening regulatory crisis and fresh money laundering allegations, triggering a 42.4% loss in market capitalization over the last 3 trading sessions.

Following two consecutive days of 20% losses, stock exchanges adjusted the lower circuit limit to 10%. Paytm has reportedly been under investigation by the Directorate of Enforcement (ED) since 2021 for alleged money laundering and illegal betting.

Despite denying ED investigation on money laundering, Paytm has cooperated with authorities in the past and clarified that neither the company nor its founder and CEO are being investigated.

RBI alerted ED a few months ago about potential money laundering and KYC violations at Paytm, leading to speculations of the cancellation of the payments bank license.

Paytm Payments Bank, 49% owned by Paytm, received directives from RBI to discontinue most operating functions by the end of February 2024, including deposit, PPI, wallet, Fastag, BBPOU, and UPI. Additionally, PPBL was instructed not to engage with Paytm’s other business units for Nodal accounts.

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