RBI’s regulatory action sends Paytm shares plummeting 10%

The Reserve Bank of India’s recent regulatory measures against Paytm Payments Bank have triggered a sharp decline in the bank’s shares, plummeting by 10% as of 1:15 pm.

Deputy Governor Swaminathan J stated that the RBI’s actions were a result of persistent non-compliance by Paytm Payments Bank. He emphasized that such supervisory actions are taken after months or even years of engagement aimed at rectifying deficiencies, with the ultimate goal of safeguarding consumer interests.


The RBI’s imposition of significant business restrictions on January 31, including barring the acceptance of fresh deposits and credit transactions after February 29, underscores the severity of the regulatory concerns. Major irregularities in KYC processes, including instances where the same PAN was linked to hundreds or thousands of customers, raised red flags regarding potential money-laundering activities.

Additionally, the regulator identified an unusually high number of dormant accounts, posing further risks of illicit financial activities. Concerns regarding deficiencies in KYC processes and transaction monitoring systems have heightened worries about potential money-laundering activities within the bank.

In light of these developments, the RBI’s decision to maintain the key interest rate repo at 6.5% signals a continued focus on battling inflation. The monetary policy stance remains unchanged, indicating a cautious approach toward withdrawing accommodation.

The market reaction has been swift, with Paytm Payments Bank shares trading significantly lower at ₹446.65, reflecting investor concerns over the regulatory scrutiny and its impact on the bank’s operations.