Image Source : PAYTM Paytm Payments Bank
The Enforcement Directorate (ED) has initiated a preliminary inquiry into the operations of Paytm, the fintech major’s banking unit, Paytm Payments Bank. However, the ED has not yet filed an enforcement case information report, according to a media report.
At present, the ED and the Reserve Bank of India (RBI) are the sole agencies investigating the matter. If deemed necessary, the RBI has the authority to request additional assistance from other agencies, but there will be no interference from the government in this process.
An official stated, “This is a regulator’s job, and they are up to it. The RBI has taken action in customer interest. ED has also sought documents on Paytm from RBI and is studying it for any violations. There is a mechanism for sharing information among regulators, and information (on Paytm Payments Bank) has already been shared, and different agencies are examining it.”
Paytm has affirmed its commitment to cooperating with regulatory authorities and complying with requests for information regarding One97 Communications Ltd and its associate, Paytm Payments Bank.
The RBI had barred Paytm Payments Bank from taking deposits, credits, or processing top-up transactions in customer accounts due to persistent non-compliances. Additionally, the bank has been prohibited from processing other banking services like UPI facilities and fund transfers starting February 29.
Regarding the RBI’s actions, Governor Shaktikanta Das mentioned on Monday that there is “hardly any room” to review the action taken on the payments bank, emphasising that decisions are made after thorough consideration.
In response to these developments, Paytm shares experienced a sharp decline, reaching a fresh record low of Rs 342.4 on the BSE during early trading hours on Wednesday. This slump amounted to almost 10 per cent once again.
Macquarie downgraded One97 Communications to ‘underperform’ from its earlier ‘neutral’ rating and lowered its price target to Rs 275 from Rs 650. The brokerage’s current target suggests a downside of 27.7 per cent to the stock’s last close.
