The RBI's concerns have also affected Paytm's ability to form partnerships with banks, and several Indian banks have expressed caution about doing business with Paytm due to the regulatory concerns. The uncertainty surrounding Paytm's license has resulted in a 20% drop in its shares for two consecutive days, leading to a loss of approximately $2 billion in market value. Paytm's other services, including its digital highway toll payment service, FASTag, are also expected to be affected by the RBI's order.
Key takeaways:
- The Reserve Bank of India has ordered Paytm to stop accepting deposits after Feb. 29, raising concerns about the future of Paytm's banking operations and its ability to continue providing digital wallet services.
- The license for the banking business is held by Paytm Payments Bank, and for it to be transferred back to Paytm, approval from the RBI is required, which might be challenging given the concerns raised by the central bank.
- Paytm's shares have dropped 20% for two consecutive days, resulting in a loss of approximately $2 billion in market value, and several analysts have downgraded their ratings on the stock and lowered their target prices.
- Paytm's digital highway toll payment service, known as FASTag, will no longer be able to accept replenishments after Feb. 29, and this service holds a 17% market share.