India’s central financial institution prolonged the deadline for a few of the enterprise restrictions it’s imposing on Paytm’s Funds Financial institution to March 15 from February 29, giving the Indian monetary providers agency a further 15 days to adjust to the foundations however squashing probabilities of any main concessions.
The Reserve Financial institution of India stated Friday that Paytm Funds Financial institution, an affiliate agency of the Indian monetary providers agency that processes the group’s transactions, might be barred from accepting buyer deposits, credit score transactions and high ups in checking account, pay as you go devices, wallets, FASTags from March 15, 2024.
The replace follows the RBI widening its curbs on Paytm’s Funds Financial institution late final month, an replace that has wiped Paytm’s market cap by 55% to $2.6 billion within the 16 days since. Paytm, which serves greater than 15 million retailers and 330 million pockets clients, went public in 2021 at a valuation of $20 billion. Its money steadiness at December’s closure final yr stood at greater than $1 billion.
The central financial institution stated in a press release that it was extending the deadline within the “interest of customers (including merchants) of PPBL who may require a little more time to make alternative arrangements and the larger public interest.”
Many different funds financial institution’s providers might be permitted till March 15 as a substitute of the sooner February 29 deadline, the central financial institution said (PDF). The RBI additionally published an FAQ (PDF), detailing how the embargo on Paytm’s Funds Financial institution will affect service provider and clients. Within the FAQ, the central financial institution stated retailers utilizing Paytm’s QR code, soundbox and point-of-sale terminal gadgets won’t be impacted by the disruption at Paytm, supplied these machines and devices are linked to different financial institution accounts.
In its order late final month, the RBI directed Paytm in addition to Paytm Funds Financial institution to terminate their nodal accounts not later than February 29. Within the clarification posted Friday, the RBI stated it’s sustaining the identical deadline for the cancellation of nodal accounts, required by funds companies to facilitate transactions. (Paytm stated early this month that it plans to tieup with multiple banks and use their nodal accounts.)
Earlier this week, Macquarie dramatically minimize its 12-month worth goal on Paytm, citing dangers of consumers leaving the platform within the wake of heightened regulatory scrutiny. Macquarie, which famously predicted the droop at Paytm earlier than the itemizing, lowered its goal to 275 rupees, probably the most brutal by any main brokerage agency. Shares of Paytm closed buying and selling at 341 Indian rupees, or $4.11, Friday.
Verify again for updates because the story develops.
