As hopes of an early resolution to regulatory troubles dimmed, shares of One 97 Communications, which runs Paytm, fell up to 9% to the day’s low at Rs 408 on BSE on Friday. Today’s decline comes after the stock ended Thursday’s session in 10% lower circuit.

While talking to reporters at the end of the monetary policy committee meeting on Thursday, RBI officials maintained their tough stance against Paytm saying that the action was taken after persistent non-compliance and that the fintech was given enough time to take corrective measures.

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.

In the meantime, ET reported that RBI will meet the National Highways Authority of India (NHAI) and National Payments Corporation of India (NPCI) among others next week to finalise modalities for the migration of merchants and consumers from Paytm.

Also Read | SoftBank Vision Fund sold down Paytm stake before shares plungedEarlier in the week, Paytm founder Vijay Shekhar Sharma had also met Finance Minister Nirmala Sitharaman recently who is believed to have told him to discuss the matter with RBI and sort out the non-compliances that have been flagged.Sharma is said to have sought an extension of the February 29 deadline, a transition plan and detailed the efforts underway to meet compliances specified by RBI. The regulator is now said to be contemplating cancellation of the licence of Paytm Payments Bank.

Paytm share price trajectory

Ever since the RBI ban was issued on January 31st evening, Paytm shares have so far tumbled 46%. Barring the two days of relief rally, which might have left many buy-the-dip investors trapped, the stock has been on a downhill trajectory with investor loss mounting up to Rs 22,000 crore.

Market experts have warned retail investors to avoid being on the buy side until Paytm is out of the woods as far as regulatory issues are concerned.

“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.

Global broking firm Bernstein has, however, advocated a buy-the-dip strategy while giving a target price of Rs 600.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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