India's Paytm shares set to tumble after central bank orders banking unit to stop business
Upstox
1 min read • Updated: February 1, 2024, 9:48 AM
Summary
The Reserve Bank of India (RBI) on Wednesday ordered Paytm Payments Bank, an associate of Paytm, to stop accepting fresh deposits in its accounts or popular wallets from March. Paytm said this RBI directive could have impact of ₹300 to ₹500 crores on its annual EBITDA going forward
BENGALURU, Feb 1 (Reuters) - Shares of Indian payments firm Paytm are set to open lower on Thursday, after a move by the country's financial regulator to halt business at Paytm's payments bank unit sparked fears of hits to the company's profitability and reputation.
The Reserve Bank of India (RBI) on Wednesday ordered Paytm Payments Bank, an associate of Paytm, to stop accepting fresh deposits in its accounts or popular wallets from March, raising worries that the move could erode revenue from the company's main payments business.
Paytm said it will take steps immediately to comply with the RBI's directions, and that it expects a worst-case impact of ₹300 crore-₹500 crore ($36 million-$60 million) to its annual earnings before interest, tax, depreciation and amortisation (EBITDA).
Following the RBI action, shares of PayTM open at 20% lower circuit in market opening hours.