As per a Reuters report, the committee will be chaired by M Damodaran, the former chairman of India’s markets regulator, and is expected to work in close coordination with Paytm’s board.”Former chairman of India’s markets regulator, M Damodaran, will lead the panel, which ‘will work closely with the board’,” Paytm disclosed in a statement.
The directive from the RBI last week instructed Paytm Payments Bank to halt its business operations, including deposits, credit products, and its widely used digital wallets by February 29, citing “persistent non-compliance.” Paytm Payments Bank plays a crucial role in facilitating deposits for Paytm users, enabling them to conduct transactions through the app.
Additionally, Paytm has faced scrutiny from the Enforcement Directorate (ED) over allegations of foreign exchange rule violations, which the company has labeled as “unfounded and factually incorrect.”
The payments firm, competing with giants like Walmart’s PhonePe and Google, is a popular choice among Indian consumers for a wide range of transactions, from grocery shopping to purchasing household items.
Following the RBI’s actions on January 31, Paytm’s stock has witnessed a significant downturn. Shares of One97 Communications Ltd, the parent company of Paytm, experienced a sharp decline, dropping over 15% in just two days. The stock’s value plummeted by 6.09% to close at Rs 419.85 on the BSE, with an intraday low of 8.67% at Rs 408.30. Similarly, on the NSE, the shares fell by 6.15% to Rs 419.15, with a day’s low of 8.20% at Rs 410. This two-day slump erased Rs 4,870.96 crore from its market valuation on the BSE.
The stock’s decline was part of a broader trend that saw the company’s market valuation decrease by over Rs 20,471.25 crore following the RBI’s crackdown, which began on February 1.
RBI governor Shaktikanta Das recently commented on the situation, saying that there are no systemic concerns but emphasized that the action against Paytm was necessitated by the company’s non-compliance.
(With inputs from agencies)