The regulatory action has caused Paytm shares to plummet, with shareholders losing $2.5 billion as of Monday. However, shares later jumped by up to 8%, with analysts at Bernstein suggesting the initial plunge was an overreaction. The company is also under investigation by India's federal anti-fraud agency over potential violations of foreign exchange rules, which Paytm denies.
Key takeaways:
- Paytm CEO Vijay Shekhar Sharma met with the Reserve Bank of India (RBI) to discuss plans to address regulatory concerns after the RBI imposed restrictions on Paytm Payments Bank.
- The RBI had ordered Paytm Payments Bank to stop accepting new deposits in its accounts and digital wallets from March, citing supervisory concerns and non-compliance of rules.
- Paytm is seeking clarity from the RBI regarding the transfer of license for the wallets business and digital highway toll payment service Fastag.
- Shares of Paytm fell to a record low amid these concerns but later jumped as much as 8%, with analysts at Bernstein suggesting the initial plunge was an overreaction.