India’s Paytm nears record low, market value down about $2.5bn since RBI crackdown

BENGALURU: Shares of Indian digital payments firm Paytm slumped 10% to a near record low on Monday, extending a rout from last week triggered by a regulatory crackdown on its banking unit.

Paytm has lost about $2.5 billion or about 43% of its market value since the Reserve Bank of India (RBI) told Paytm Payments Bank on Wednesday to stop accepting fresh deposits in its accounts or popular wallets from March.

The stock fell by its daily trading limit to 438.5 rupees ($5.28) on Monday, just shy of the previous all-time low of 438.35 rupees hit in November 2022.

RBI’s order, which has far-reaching consequences for how India’s most popular digital payments app Paytm operates, led to a 20% drop in the stock - its daily maximum at that time - on Thursday and Friday.

Paytm is in exploratory talks with HDFC Bank and Jio Financial Services to sell its wallets business, which is housed under Paytm Payments Bank, the Hindu Business Line newspaper reported on Monday.

Paytm, HDFC Bank and Jio Financial did not immediately respond to Reuters’ requests for comment.

The RBI has found hundreds of thousands of accounts at Paytm Payments Bank created without proper identification and has passed the information on to the country’s financial crime fighting agency, three sources familiar with the matter said.

The RBI is concerned that some of the accounts could have been used for money laundering, according to the sources.

India’s Revenue Secretary Sanjay Malhotra told Reuters on Saturday the financial crime fighting agency would probe Paytm Payments Bank if any fresh charges of fund siphoning are found.

Thousands of accounts at India’s Paytm Payments Bank set up improperly

Paytm denied money laundering allegations and said the company and Paytm Payments Bank have never been probed by the Enforcement Directorate.

India’s stock exchanges have cut Paytm’s daily trading limit to 10% from 20%, after the stock crashed on Thursday and Friday.