Fresh comments from RBI officials that the action against Paytm was taken after persistent non-compliance added to the selling pressure. RBI Governor Shaktikanta Das made it clear that such restrictions are proportionate to the gravity of the situation and aspects like systemic stability and depositor’s interests can’t be compromised
“Such restrictions which we impose are always proportionate to the gravity of the situation. All our actions, being a responsible regulator, supervisor, are in the best interest of systemic stability and protection of depositors or customers’ interest. These aspects can not be compromised,” Das told reporters.
RBI deputy Governor Swaminathan Janakiraman said Paytm was given enough time to take corrective measures.
Also read | Modi effect? LIC shares zoom 9% to become 4th largest stock, bigger than ICICI Bank
A relief rally in the last two days had pushed the stock over 13% higher. Investors lost patience with Paytm after founder Vijay Shekhar Sharma’s meeting with Finance Minister Nirmala Sitharaman and RBI officials failed to yield any positive result, at least immediately.Investors also noticed more red flags after ET reported that securities depository CDSL is conducting an inspection of the customer verification process followed by Paytm Money, the wealth management entity run by One 97 Communications.Small investors who chose to ride the momentum in Paytm shares seen in the last two days are now feeling trapped. Since the RBI’s diktat was out on January 31 evening, Paytm shares have lost about 41% of its value.
Analysts say averaging out your portfolio could be extremely risky at this stage till the time regulatory troubles ease out.
“We are trying to catch a falling knife, as we say in market parlance, and it is always avoidable. As far as Paytm is concerned, the RBI direction has pretty much stopped the business of the payments bank. There is a whole lot of uncertainty. There are some meetings happening, but how far if at all remedial actions are approved by the regulator is a big question mark. As things stand today, the customer confidence, partner confidence obviously for obvious reasons have eroded completely. There is a clamour amongst customers and partners to move out,” said Sudip Bandyopadhyay of Inditrade Capital.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
(You can now subscribe to our ETMarkets WhatsApp channel)
Download The Economic Times News App to get Daily Market Updates & Live Business News.
Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price