PayKun Payment Gateway: India's 'Alipay' Paytm shares tumble after RBI halts most of its operations 20%

On 1 February, several international media outlets reported that Indian payments giant Paytm, dubbed the "Paypal of India", saw its market capitalisation drop by $20% after the Reserve Bank of India (RBI) ordered its payments bank subsidiary to cease operations. The move not only threatened the company's profitability, but also impacted the functionality of its apps. .

On the same day, shares of Indian payments giant Paytm also plummeted by 20%.RBI pointed out that Paytm has persistently violated regulatory requirements and there are regulatory concerns. As per RBI's directive, the bank branches handling Paytm's transaction operations have to cease operations after 29 February. However, existing Paytm customers will still be able to withdraw funds without restrictions and utilise the balance in their prepaid cards or wallets.

An insider revealed that RBI's order could be a precursor to revoking Paytm's banking licence. The source said Paytm has been violating RBI's rules for years, including those on customer information review, use of funds and technology infrastructure.

On 1 February, Paytm's shares fell to a six-week low of Rs 609, down 20%, at the bottom of the trading range set by the exchanges. The day also marked the lowest market capitalisation since the company went public in 2021.

Founded in 2010, Paytm is India's largest payment platform, commonly known as "Paypal India". As of November 2023, Paytm has more than 300 million registered users, accounting for half of India's total internet users. The platform supports over 20 million merchants and has evolved into a comprehensive financial services platform covering digital payments, insurance and credit services.