{"id":330623,"date":"2024-02-03T18:09:34","date_gmt":"2024-02-03T12:39:34","guid":{"rendered":"https:\/\/www.indialegallive.com\/?p=330623"},"modified":"2024-02-03T18:09:34","modified_gmt":"2024-02-03T12:39:34","slug":"paytm-payments-bank-rbi-notification-warning","status":"publish","type":"post","link":"https:\/\/www.indialegallive.com\/magazine\/paytm-payments-bank-rbi-notification-warning\/","title":{"rendered":"Paytm Mat Karo"},"content":{"rendered":"\n
Paytm Payments Bank has been slapped with a central bank order that could see it wither, unless many of the compliances demanded by the bank are immediately met. In the end, other payment portals will benefit<\/h2>\n\n\n\n
By Sujit Bhar<\/strong><\/p>\n\n\n\n
\u201cPAYTM karo…\u201d may not become history yet, but the bank associated with it is surely in deep trouble, facing cancellation of licence. Paytm, one of the largest and most elaborate UPI Payment gateways of India, had a Reserve Bank of India (RBI) notice slapped on it (also on One97 Communications Ltd, its parent) on January 31, ordering Paytm Payments Bank to stop accepting fresh deposits in its accounts or popular wallets from March this year.<\/p>\n\n\n\n
The start-up, which was conceived as a fintech firm in the new Indian business ecosphere, and one which grew to national importance on the back of a painful crisis called demonetisation, has been having its nose rubbed in the ground for quite some time in the past. And today, after the RBI found that the bank has not bothered to adhere to any KYC requirements as per RBI guidelines, putting the entire banking system\u2019s checks and balances in jeopardy, the notice was sent.<\/p>\n\n\n\n
One remembers that evening, on November 8, 2016, when Prime Minister Narendra Modi, in an 8pm nationally televised broadcast, declared that Rs 500 and Rs 1,000 currency notes will no longer be valid, creating an ocean of confusion and chaos among the common people. The very next day, Paytm brought out full page print ads in newspapers, with its founder Vijay Shekhar Sharma congratulating the Prime Minister, with a word play on its tagline \u201cAb ATM nahin, #Paytm karo\u201d. The ad also had the PM\u2019s picture in it.<\/p>\n\n\n\n
This not only showed\u2014at least Sharma wanted it to show that way\u2014 the proximity of the PM with the organisation, but people were almost sure that when Sharma was able to ideate, design and issue release orders of so many ads in newspapers the very next morning, he surely had an inkling of the pending announcement of the PM long before that fateful November 8 evening.<\/p>\n\n\n\n
From that stupendous high, and with his payment module becoming almost a monopoly for some time after demonetisation, to this crash has been a long journey, not much of which has been happy.<\/p>\n\n\n\n
In an address to a group of founders of start-ups, Sharma tried to show a brave face, saying: \u201c(The) Indian start-up dream must overcome every situation collectively… We should not let anything deter us from what we all have built over so many years.\u201d Paytm has said it will terminate business with its affiliate (bank) and seek partnership with other banks, but it is easier said than done.<\/p>\n\n\n\n
So much bravado, though, seems synthetic in the face of what has happened and how public sentiment has already started going against the company.<\/p>\n\n\n\n
Share prices crash<\/h2>\n\n\n\n
As of writing this\u2014Friday, February 2, post trading hours\u2014the share price of Paytm fell another 20% (it had fallen 20% to hit the day\u2019s lower circuit breaker on Thursday as well) before hitting the lower circuit that temporarily halts trading. Paytm fell to Rs 487 within minutes of the market opening, the lowest it has hit in 55 weeks.<\/p>\n\n\n\n