Paytm Shares Fall Over 6% After RBI Cancels Payments Bank Licence

Shares of One 97 Communications declined more than 6% in early trade on April 27 after the Reserve Bank of India cancelled the licence of Paytm Payments Bank, according to company disclosures and exchange data.

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The stock was trading at ₹1,077, down 6.1% during morning trade, reacting to the regulatory action that formally ends the payments bank’s ability to operate.

RBI Action And Immediate Impact

The Reserve Bank of India’s decision follows earlier restrictions imposed in January 2024, when the regulator had barred the payments bank from accepting fresh deposits and directed a phased wind-down of operations, as per official statements.

With the licence now cancelled, Paytm Payments Bank can no longer carry out banking activities. The company said in a statement that the move does not materially impact its near-term earnings, as the payments bank business had already become largely non-operational following earlier curbs.

Shift To Partner-Led Model

One 97 Communications has transitioned its payments and settlement operations to third-party banking partners. This involves the UPI payments system and merchant transactions, which have been redirected to partner banks, as stated by the company.

The company is no longer operating on its own banking system and has outsourced the same to other entities.

Stock Performance

Although there has been a drop in the recent trading session, Paytm’s stock has appreciated by about 22% over the past year. In comparison, benchmark index performance shows a decline of about 1.3% over the same period, based on publicly available market data.

Regulatory Context

The decision from the Reserve Bank of India comes after a series of actions by the organization in light of violations by Paytm Payments Bank, according to previous statements made by the RBI.

Paytm Payments Bank’s significance in the bottom line for the business had been greatly diminished as a result of the actions taken against it in 2024.

The recent announcement marks the official end of Paytm Payments Bank as a payments bank. The business will be continued via partnerships with other financial institutions.