Amidst a major disaster for Paytm Funds Financial institution, Vijay Shekhar Sharma, the CEO of the fintech large Paytm, met with Finance Minister Nirmala Sitharaman, ANI quoted sources as saying.
This assembly got here within the wake of the Reserve Financial institution of India’s (RBI) stringent directive issued on January 31, which mandated a right away halt to the onboarding of latest prospects by Paytm Funds Financial institution and referred to as for a cessation of its key banking companies post-February 29.
The RBI’s determination was rooted in “persistent non-compliances and continued materials supervisory considerations” recognized throughout the financial institution. Consequently, Paytm Funds Financial institution was additionally instructed to cease further deposits, withdrawals, and top-ups throughout varied customer-related monetary devices, together with wallets, accounts, pay as you go units, and Nationwide Widespread Mobility Playing cards (NCMC).
This regulatory motion has had a profound impression on Paytm, with shares of its mother or father firm, One97 Communications Ltd, experiencing a precipitous drop. Over simply two days, from January 31 to February 2, 2024, the corporate’s market capitalization diminished by Rs 17,378.41 crore, reflecting a 36 % decline in share worth.
In response to the RBI’s orders, Paytm sought an extension of the February 29 deadline and readability relating to the switch of licenses for pockets enterprise and FASTag operations. Nevertheless, no decision or remedial measures have been determined upon throughout the assembly between Sharma and RBI officers.
The disaster has prompted a gaggle of founders to achieve out to RBI Governor Shaktikanta Das and Finance Minister Sitharaman, requesting a evaluate of the regulatory actions imposed on Paytm Funds Financial institution. They emphasised the necessity for a reassessment of the restrictions’ proportionality, contemplating the potential repercussions for the funds financial institution, the fintech ecosystem, and the broader financial system. In addition they advocated for a chance for Paytm to rectify the deficiencies and reveal compliance.
Regardless of the challenges, Paytm has issued clarifications stating that neither the corporate nor Vijay Shekhar Sharma is below investigation for any Enforcement Directorate probe or International Trade Administration Act (FEMA) violations. Moreover, rumors of negotiations with Mukesh Ambani for Jio Monetary Companies to accumulate Paytm pockets have been denied.
Following these clarifications, Paytm shares noticed a rebound, rising 7.19 % to a excessive of Rs 438.35 on the Bombay Inventory Trade (BSE), marking an 18.81 % improve from the day’s low of Rs 395.50.
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