The Reserve Bank of India may cancel the license of Paytm Payments Bank early next month. This means that there will be a complete ban on other activities including depositing money in Paytm bank account.
Reserve Bank of India has stopped Paytm from providing banking services. Now Paytm Payments Bank may also lose its operating license at the beginning of next month. This would simply mean that Paytm will not be able to operate the banking service. On Wednesday, RBI had ordered Paytm Payments Bank, which has 49% stake in Paytm’s parent company, to close the mobile wallet business as well as other activities for not following the rules.
RBI has ordered that activities related to Paytm Payments Bank will be stopped after February 29. RBI further said that customers should not deposit money in Paytm wallet and this bank account. However, they can withdraw the deposited amount. As soon as this news came on Wednesday, Paytm shares fell by a record 20-20 percent on Thursday and Friday.
License may be canceled
A Bloomberg report said that the central bank may cancel the bank’s license after the February 29 deadline. This means that you will not be able to deposit any new amount in your Paytm Payments Bank account. Also, money cannot be deposited in the wallet. However, if you already have a deposit in it then it can be withdrawn. The report further states that no final decision has been taken and the RBI decision may change based on Paytm’s representation.
Paytm suffered huge loss
Paytm had launched its IPO with much fanfare at the end of 2021, but since then its stock has fallen by more than 70 percent. At the same time, during the last two days, Paytm shares have fallen by more than 40 percent. Due to this, its market cap has declined by $2 billion.
Warnings issued several times
It is noteworthy that RBI has taken this action due to Paytm not following the rules. Earlier, RBI had issued warnings to Paytm Payment Bank several times. The bank was adding customers without proper customer information documents for a long time. At the same time, transactions of rupees were also being done more than the limit.
