Paytm News: Is Paytm Company Going to Close Down? Share Price Halved in 2 Days

Paytm shares declined significantly following the RBI’s action against the Payment Banking Services. In just two days, the Paytm share dipped up to 50%. In response, Paytm founder Vijay Shekhar Sharma took to ‘X’ and shared that Paytm is working and will work even after 29 February. He added and thanked all of their supporters in this harsh time and said that every situation has a solution and they are committed to serving the nation in full compliance. However, Paytm shareholders are debating whether to hold or sell their shares. Apart from this, many others are buzzing about will Paytm is going to close or whether they have the potential to sustain itself in the market without its banking services.

In this article, Let’s figure out what is left for Paytm and whether RBI will lift the ban in future.

paytm news

Paytm News- What exactly is the matter?

Under section 35 A of the Banking Regulation Act, RBI exercised its power on January 29 and banned Paytm Banking Service from offering all its services for non-compliance. This means that people using Paytm Baking services won’t be able to do any transactions or top up their accounts. This may create problems for many car owners because they hold around 17% of the market share in the Fastag segment. It should be understood by the one that you can use your remaining Fastag account balance after 29 Feb, but once it is exhausted, you won’t be able to top up.

On January 29, 2024, RBI officially announced that after February 29, 2024, People will not be able to use the services of Paytm Payment Banks. After this day, the user cannot transact or top up their account. However, Paytm’s UPI services won’t be affected by this decision. Only its banking services are barred by the RBI.

Paytm Share Price Halved in 2 Days

Following the ban on Paytm Banking services, its share witnessed a 20% plunge on 31 January 2024 in intraday trading, a six-week low, and…

The next day, its share retook a 20% dip and reached its low circuit limit. It closed at 487.20, and now its share is trading at a discounted price of 77% (approximately) compared to its issue price of 21,50 per piece.

As the shareholder who has been with them since the IPO offering saw many ups and downs when back on November 22, its shares plunged to an all-time low of ₹ 438, but that was a different scenario. Things have now completely changed for them, creating so many challenges.

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Paytm News: Reason for concern

RBI’s ban on Paytm Baking services is a serious blow to their services now. It may create a series of concerns among the users and shareholders.

Loss in Revenue: Banking services play a major role in Paytm services, which produce transaction fees and other income. Losing this and a lack of alternative options, the shareholders may lose their profitability and confidence.

Increase the expense: Now, the company needs to find an alternative option for the previously offered services, which may lead to additional expenses.

Brand Value: The announcement of the service ban may create a nuisance among the customer and their shareholder, costing their brand value.

Trust Issue: As the ban is imposed after non-compliance with services, it’s hard for the customer to use their other services and believe further, which may also impact their customer base.

Expert Opinions on Paytm’s Future

Experts suggest what Paytm should be’s next move to keep their customer base, which they earned over the year. Here are some potential options:

  • They can seek partnerships with other established player to offer their service under their license.
  • They can expand their offering by collaborating with fintech players in the microloan business.
  • Another option they have to partner with retailers to offer in-store payment and loyalty bonuses.

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Paytm Actions

  • But before taking further steps, they must demonstrate robust management and a strong commitment to regulatory compliance.
  • Invest more in strengthening their compliance infrastructure and process.
  • Connect with RBI and other authorities actively to address their concern.
  • Build trust in their consumer and RBI authorities and explain to them their plans.
  • Address customer queries immediately by providing efficient support.
  • Enhance the data security and rebuild customer trust.
  • Speak to their shareholder and stand tall with them.

Is Paytm going to shut down because of the RBI ban?

RBI only bans Paytm banking services, but this doesn’t mean Paytm will shut down. Its other services will remain operational.

What happened to my money in the Paytm Payments Bank?

One can withdraw it anytime, even after the 29th of February; however, they won’t be able to make any new transactions after the given date.

Can I still use Paytm for other services like e-commerce and payment gateway?

Yes, these services are available because these services won’t be affected by the RBI action.

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