Amidst the turbulence surrounding Paytm due to RBI restrictions on its Payments Bank, the fintech giant's shares soared by 10% to INR 496.75 on the BSE on February 7. This surge comes after a sharp decline of over 42% in the preceding three trading sessions.
Following the RBI's decision on January 31 to restrict Paytm Payments Bank from certain banking services, concerns arose regarding the impact on Paytm's operations. Notably, Paytm's parent company, One97 Communications, holds a 49% stake in the Payments Bank.
In response to these developments, Paytm disclosed that it anticipates the RBI's restrictions to affect its annual EBITDA by INR 300-500 Cr, further raising apprehensions about the company's financial performance. Several brokerages have also cautioned about the potential financial implications for Paytm.
To address these concerns, Paytm CEO Vijay Shekhar Sharma engaged in discussions with RBI officials on Monday, seeking an extension of the February 29 deadline for the Payments Bank. However, despite these efforts, Sharma reportedly did not receive any assurances from the central bank.
Following the meeting with RBI officials, Sharma also met with Finance Minister Nirmala Sitharaman, though the specifics of the discussion remain undisclosed. However, the meeting, lasting around 10 minutes, suggests efforts to navigate the regulatory challenges facing Paytm.
In response to the ongoing crisis, reports indicate that the RBI may issue a clarification, considering Paytm's significant user base. This potential clarification signals the central bank's recognition of the broader implications of its regulatory actions on Paytm and the fintech ecosystem at large.
