Paytm: A ban on Paytm Payments Bank has been declared by the Reserve Bank of India (RBI). The RBI claims that Paytm has broken the law. Thus, it was necessary to take this action. Paytm is discontinuing many of its services as effective February 29. The Paytm shares are showing the effects of this RBI intervention.
Paytm Shares in Crisis
Since last Thursday, Paytm shares have been consistently reaching lower circuits. Paytm is not in good shape right now. Investors are losing a lot of money. In the meantime, there is a lot of conversation on social media concerning Mukesh Ambani‘s Jio Payments Bank in the midst of the RBI action against Paytm.
Actually, people are talking about an old Jio Payments Bank advertisement that they saw on social media. This provides details on the advantages of Jio Payments Bank. Despite the fact that this commercial is outdated. But now that Paytm has been banned by the RBI, Jio Payments Bank is being proposed.
Jio Payments Bank Inception
On April 3, 2018, Jio Payments Bank Limited commenced its banking activities. In accordance with Section 22 (1) of the Banking Regulation Act, 1949, the Reserve Bank has granted the bank a licence to operate as a payments bank. August 2015 saw the in-principle approval of 11 applications, including Reliance Industries, to establish a payments bank.
With a 30% ownership in the joint venture, State Bank of India (SBI) and Jio Payments Bank have partnered. SBI‘s stake, however, dropped to 23% in FY23, demonstrating its disinterest in Jio Payments Bank’s business plan.
Dismissing Misinformation Amid RBI Ban
In this case, a statement from Paytm Payments Bank advises against believing misinformation. Paytm continues to offer its services, such as Soundbox, UPI, and QR Code. The company says it would immediately follow the RBI’s instructions and will collaborate with the regulator to promptly resolve any concerns. The company estimates that the RBI limits will have an impact on EBITDA of between Rs 300 and Rs 500 crore.
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