Paytm Shares Plunge 20% To Hit Lower Circuit After RBI’s Action On Payments Bank

A Day after the Reserve Bank of India (RBI) directed the Paytm Payments Bank to stop accepting deposits or top-ups in any customer accounts wallets, FASTags, and other instruments after February 29, the shares of fintech company Paytm plunged 20 per cent in pre-open trade on Thursday. 

Paytm’s stock fell to a six-week low of Rs 608.80, its lower circuit limit on the Bombay Stock Exchange (BSE). It fell 19.99 per cent at the National Stock Exchange (NSE) to reach the lowest trading permissible limit of Rs 609 for the day, as reported by news agency PTI. 

In early trading, the company's market capitalization (mcap) decreased by Rs 9,646.31 crore to Rs 38,663.69 crore. This comes after the Reserve Bank of India (RBI) on Wednesday ordered the Paytm Payments Bank to stop accepting deposits or top-ups in any customer accounts,  FASTags, wallets, and other instruments from March 1.

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The central bank in 2022 directed the Paytm Payments Bank to restrict customer additions due to non-compliance issues. Now, the RBI has instructed the bank to stop accepting new deposits without specifying a review timeline for the imposed restrictions. 

Following the decision, Paytm said that it expects a ‘worst case impact’ of Rs  300 crore to Rs 500 crore on its yearly earnings following the RBI's directive prohibiting Paytm Payments Bank from accepting new deposits.

"Depending on the nature of the resolution, the company expects this action to have a worst-case impact of Rs 300-500 crore on its annual EBITDA going forward. However, the company expects to continue on its trajectory to improve its profitability," Paytm said in a regulatory filing, as quoted by PTI.