PAYTM Crisis, its meaning. Let’s Explain:
Son of a schoolteacher from Aligarh district in Uttar Pradesh, Vijay Shekhar Sharma is the founder of paytm and Paytm is the popular Fintech Company provides digital payment services like wallet, booking movie ticket and others. It has Paytm Payment Bank services also and in the current crisis, the Reserve Bank has ordered Paytm Payments Bank to halt most of its business. Now it’s a big problem for Paytm as well as its users.
Lets understand what exactly the issue is:
What was the recent RBI action against Paytm Payments Bank all about?
Recently the RBI ordered Paytm that it can’t lend and can’t take any further deposits. Restricted prepaid instruments, wallets after February 29. Paytm wallet customers can use money till the time their balance is exhausted. They cannot add money after February 29. Mainly the restriction is all about Paytm Payments Bank related.
Let’s Talk about Paytm Payments Bank:
Paytm Payments Bank Limited (PPBL) is an associate of One97 Communications Limited (OCL). One97 Communications holds 49 per cent of the paid-up share capital (directly and through its subsidiary) of Paytm Payments Bank Limited. A 51 per cent stake in the bank is of Vijay Shekhar Sharma. Paytm Wallet, which comes under Paytm Payments Bank Limited.
Highlighted Issues of paytm on which RBI imposed restriction.
Thousands of ‘Paytm Payments Bank’ accounts created improperly and major irregularities in KYC also. Money laundering case is also there.
Now Let’s discuss about us means users, which services can still be use or which can’t use?
Your favourite – Paytm app is working, and will keep working beyond 29 February as usual. We are sincerely committed to serving our nation. “To every Paytmer, Your favourite app is working and will keep working beyond 29 February as usual. I with every Paytm team member salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance. India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it,”
The Founder & CEO Vijay Shekhar Sharma Tweeted.
So let’s summarize and outline what will be working:
- Paytm app and its services continue to remain operational
- merchant payment services will not be impacted, Paytm QR, Paytm Soundbox, Paytm Card Machine, will continue as before, where it can onboard new offline merchants also.
- The Paytm UPI handle will continue without interruption until February 29, 2024.
- There won’t be any impact on user deposits in their Savings accounts, Wallets, FASTags, and NCMC accounts, and they can continue to use the existing balances till February 29, 2024.
- Paytm Money is also safe because Paytm Money Limited is SEBI-regulated and fully compliant. Same for its Mutual Funds.
Now there is news which blows most of the investors’ minds. Let’s discuss on this:
Mukesh Ambani to acquire Paytm wallet? Jio Financial shares soar after report
Jio Financial Services shares rallied up to 14% to day’s high at ₹288.75 on BSE after a newspaper report claimed, Paytm’s parent company-One 97 Communications is in talks with the Mukesh Ambani-owned NBFC and India’s biggest Bank HDFC Bank to sell its wallet business. Let’s see what will happen.
Lets talk about its impact on its Share
Following the RBI’s crackdown, shares of Paytm down by 40 per cent in the last two days. The stock tanked 20 per cent to Rs 487.05, its lowest trading permissible limit for the day, on the BSE on Friday.
In two days, Paytm’s market capitalization is very much impacted on this crisis.
