Get the Scoop on the RBI’s Fintech Unicorn Crackdown Now!

February 5, 2024
1 min read

The Reserve Bank of India (RBI) has imposed restrictions on Paytm Payments Bank, preventing it from accepting deposits, credit transactions, and top-ups in customer accounts. The central bank has also prohibited the bank from offering other banking services, such as UPI facility and fund transfers, after February 29, 2024. The share price of Paytm has fallen significantly since the RBI’s actions. Reports have surfaced suggesting that Jio Financial Services and HDFC Bank are in talks to acquire Paytm’s wallet business. Paytm has denied these reports and stated that it is not facing any investigation from the Enforcement Directorate. The company’s founder, Vijay Shekhar Sharma, has assured employees that there will be no layoffs and that the company is in discussions with the RBI to resolve the issue. The RBI is considering cancelling Paytm Payments Bank’s operating license next month. Paytm’s shares have hit the lower circuit limit in two consecutive trading sessions. Traders and businesses have been encouraged to switch from Paytm to other payment platforms in response to the RBI’s crackdown. Paytm’s annual EBITDA is expected to take a hit of INR 300-500 crore as a result of the central bank’s actions on its payments bank.

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