In an unexpected move that sent shockwaves through India's fintech sector, the Reserve Bank of India's stringent measures against Paytm Payments Bank have caused a significant damage to Paytm's market valuation.
The central bank has restricted Paytm Payments Bank from accepting deposits/top-ups in any customer account, wallets, and FASTags after February 29.
The decision was reportedly taken due to non-compliance with regulations and supervisory concerns.
Amidst the turmoil, GOQii founder Vishal Gondal took to X (formerly Twitter) to voice his solidarity with Paytm's founder, Vijay Shekhar Sharma, in a poignant message that resonates with the resilience and unity of the Indian startup ecosystem.
"Dear @vijayshekhar, we are all in shock watching what has unfolded today. All I can say on behalf of everyone is that the Indian Startup community is strongly behind you," he wrote.
Dear @vijayshekhar, we are all in shock watching what has unfolded today. All I can say on behalf of everyone is that the India Startup community is strongly behind you.— Vishal Gondal (@vishalgondal) January 31, 2024
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तू न थकेगा कभी
तू न थमेगा कभी
तू न मुड़ेगा कभी
Gondal's heartfelt words, "तू न थकेगा कभी तू न थमेगा कभी तू न मुड़ेगा कभी," which in English reads, "You will never tire, you will never stop, you will never turn back,' echo as a rallying cry, underscoring the community's unwavering support for one of its most beleaguered members.
What really happened with Paytm Payments Bank?
As per RBI's statement, "The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action."
The central bank further said, "withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards are to be permitted without any restrictions, up to their available balance".
What does Paytm say?
Paytm, in an exchange filing, said that Paytm Payments Bank Limited (PPBL) is taking immediate steps to comply with RBI directions, including working with the regulator to address their concerns as quickly as possible.
The RBI's action has caused significant damage to the company's market valuation. Paytm, which is listed on the BSE and NSE, opened with a 20% lower circuit, eroding its valuation by Rs 9,646.31 crore to Rs 38,663.69 crore in early trade.
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