India’s central financial institution has prolonged the deadline for some enterprise restrictions on Paytm’s Funds Financial institution to March 15 in “bigger public curiosity,” dashing hopes of any main concessions however permitting further time to conform.
The Reserve Financial institution of India (RBI) mentioned on Friday that Paytm Funds Financial institution will probably be barred from accepting deposits and facilitating credit score transactions from March 15. The order initially had set a deadline of February 29.
The extension follows curbs final month that wiped 55% from Paytm’s market cap, which floated in 2021 at a $20 billion valuation. The fintech serves over 15 million retailers and 330 million pockets clients. Its money reserves stood at over $1 billion on the finish of December.
The RBI mentioned in an announcement that it was extending the deadline within the “curiosity of shoppers (together with retailers) of PPBL who could require somewhat extra time to make different preparations and the bigger public curiosity.”
Many different funds financial institution’s companies will probably be permitted till March 15 as an alternative of the sooner February 29 deadline, the central financial institution mentioned (PDF). The RBI additionally printed an FAQ (PDF), detailing how the embargo on Paytm’s Funds Financial institution will impression service provider and clients. The central financial institution mentioned retailers utilizing Paytm’s QR code, soundbox and point-of-sale terminal units won’t be impacted by the disruption at Paytm, offered these machines and devices are linked to different financial institution accounts.
Final month the RBI ordered Paytm to shut nodal accounts by February 29. It’s sustaining this deadline – funds corporations use such accounts to allow transactions. Paytm mentioned Friday it has shifted its nodal account to Axis Financial institution. “This association is anticipated to seamlessly change the nodal account that OCL was utilizing with Paytm Funds Financial institution. Paytm Fee Providers Ltd (PPSL), OCL’s wholly owned subsidiary has already been utilizing the Axis Financial institution companies, since its inception,” Paytm mentioned.
Earlier this week, Macquarie slashed its Paytm value goal to 275 rupees, or $4.11, over regulatory dangers, sparking fears clients might exit. Shares closed Friday at 341 rupees.
The RBI has not disclosed Paytm’s violations, however mentioned final week it solely acts after “persistent non-compliance.” Governor Shaktikanta Das said the financial institution engages bilaterally first to push corrective motion. Any response is “proportionate to the gravity.”
Many hoped the RBI would soften its stance, however Friday’s replace suggests it plans to proceed.
