In a dynamic turn of events, shares of One97 Communication, the parent company of Paytm, displayed a steady performance on the BSE and NSE bourses today, opening at 391.00. This marks a marginal increase of 0.68% or 2.65 points from its previous closing position at 09:27 AM.
The stability in share prices comes on the heels of a 3.74% decline witnessed on Thursday, settling at 380.45. Notably, Paytm’s shares had hit the upper circuit for four consecutive sessions before this dip.
Earlier in the week, the stock had surged to ₹ 395.25 and ₹ 395.05 on the BSE and NSE, respectively, defying broader market trends. This upward movement signals a recovery for Paytm, with its stock rebounding by more than 21% since last Thursday.
Recent reports shed light on the ongoing scrutiny faced by Paytm, particularly in the investigation conducted by the Enforcement Directorate (ED) into Paytm Payments Bank Ltd (PPBL). The ED reportedly found no significant violations of foreign exchange rules but identified lapses in the company’s KYC processes and reporting of suspicious transactions.
This intensified scrutiny aligns with the Reserve Bank of India’s (RBI) broader efforts to tighten oversight on fintech firms globally. The RBI’s recent directive to halt certain operations of PPBL due to non-compliance issues has impacted One97 Communications, despite its 49% stake in the banking entity.
The RBI’s enhanced regulatory measures are prompted by concerns over customer due diligence, data privacy, and systemic risks, leading to a reevaluation of oversight mechanisms, with a specific focus on digital customer identification practices.
In response to the regulatory landscape, the RBI has increased inspections and engagements with fintech companies, aiming to bolster compliance and ensure the integrity of the financial ecosystem.
As the industry navigates these regulatory challenges, experts such as Ashish Fafadia of Blume Ventures foresee a positive outcome, anticipating that the scrutiny will foster compliance and encourage investment in law-abiding companies within the fintech sector. The evolving regulatory scenario may bring about higher compliance standards and capital requirements, potentially leading to sector consolidation in the future.
