RBI Orders Paytm Payments Bank to Halt Major Operations, Impacting Profitability

The central bank's directive comes after an audit revealed 'persistent non-compliances,' leading to a significant drop in Paytm's market value.

The Reserve Bank of India (RBI) has ordered Paytm Payments Bank to halt most of its business activities due to supervisory concerns, impacting Paytm's profitability and operations.
Existing Paytm Payments Bank customers can withdraw or use their funds without restrictions, but the bank is barred from accepting new deposits or facilitating credit transactions after February 29, 2024.
Paytm plans to comply with the RBI's directives and will partner with other banks to continue its payment and financial services, minimizing the impact on its loan distribution, insurance distribution, and equity broking operations.
Shares of Paytm plummeted 20%, erasing approximately $1.2 billion in market value, following the RBI's announcement.
Critics, including BharatPe co-founder Ashneer Grover, argue that the RBI's stringent actions against Paytm Payments Bank could harm the fintech sector in India.