Following RBI’s restrictions on Paytm Payments Bank Ltd (PPBL), Paytm witnessed a 42 percent fall in its stocks in the last three trading sessions. But this morning, Paytm shares were trading at a 5 percent increase compared to the previous close.
Managing Director Vijay Shekhar Sharma reportedly met with RBI officials, but the meeting resulted in no forward movement on any remedial measures. Meanwhile, another news circulated that the Enforcement Directorate may probe money laundering allegations against Paytm.
News regarding the possibility of Paytm being used as a medium for money laundering was first reported by PTI.
Paytm has denied all allegations and said that neither the company nor its founder and CEO are being investigated by the Enforcement Directorate on money laundering charges.
Besides this, the Confederation of All India Traders (CAIT) also issued an advisory urging brick-and-mortar businesses to shift to alternative payment applications – adding to the burden for the fintech major.
“The RBI has imposed certain restrictions, prompting CAIT to recommend that users take proactive measures to protect their funds and ensure uninterrupted financial transactions. Large number of small traders, vendors, hawkers and women are making payments through Paytm and, as such, RBI restrictions on Paytm could lead to financial disruptions for these people,” said CAIT on February 4.
As per the reports, Paytm founder Vijay Shekhar Sharma assured employees that there will be no layoffs. The company is actively engaging with the Reserve Bank of India (RBI) and collaborating with other banks for potential partnerships.
“You are a part of the Paytm family, and there is nothing to worry about. Many banks are helping us. We are not completely sure of things…like what exactly went wrong. But we will figure out everything soon. We will reach out to the RBI to see what can be done,” said Sharma to Paytm employees
Jio Financial Services shares witnessed 14 percent hike yesterday at ₹288.75 on BSE (Bombay Stock Exchange) after a newspaper report claimed that One 97 Communications (Paytm parent) is in talks with the Mukesh Ambani-owned NBFC and private sector lender HDFC Bank to sell its wallet business.
However, Jio Financial late in the evening clarified that it has “not been in any negotiations in this regard”.
The Hindu Business Line (paywalled) reported that HDFC Bank and Jio Financial are said to be among the frontrunners to acquire Paytm’s wallet business. It is worth noting that Paytm is said to be in talks with Jio Financial since last November, but initiated talks with HDFC Bank right after RBI’s ban on Paytm Payments Bank – according to various reports.
It is worth noting that Jio Payments Bank owned by Jio Financial is innovated to launch digital savings accounts, debit cards, and bill payment options backed with 2,400 business correspondents. Besides this, Jio has carried out a pilot launch of Jio Voice Box, enabled Jio phones with UPI, and also implementing QR codes.