Paytm, India's leading digital payment platform, saw its share price drop by 20% for the second consecutive day after the RBI imposed restrictions on its lending business. Brokerages have downgraded Paytm and lowered their target prices, citing concerns about the impact on its lending operations.
Paytm Share Price Drops 20% After RBI Imposes Lending Restrictions
Paytm, India's leading digital payment platform, has seen its share price drop by 20% for the second consecutive day after the Reserve Bank of India (RBI) imposed restrictions on its lending business. The RBI has ordered Paytm Payments Bank to stop adding new customers and barred it from onboarding new merchants until it fixes "material supervisory concerns".
Brokerages have downgraded Paytm and lowered their target prices, citing concerns about the impact on its lending operations. Paytm's share price fell by 12% on Monday and by a further 8% on Tuesday, bringing its total losses to over 20% in two days.
FAQs
The RBI has not disclosed the specific reasons for its decision, but it has cited "material supervisory concerns". These concerns may relate to Paytm's lending practices, its risk management systems, or its compliance with regulatory requirements.
The restrictions are likely to have a significant impact on Paytm's lending business. Paytm will not be able to add new customers or merchants, which will limit its ability to grow its loan portfolio. The restrictions may also lead to an increase in bad loans, as Paytm may be forced to lend to riskier borrowers.
The RBI's decision has led to a sharp sell-off in Paytm's shares. The company's share price fell by 12% on Monday and by a further 8% on Tuesday, bringing its total losses to over 20% in two days. The sell-off is likely to continue in the coming days, as investors become more concerned about the impact of the RBI's restrictions on Paytm's business.
The RBI's decision is likely to have a negative impact on Paytm's customers. Paytm will not be able to offer new loans to its customers, and it may be forced to increase interest rates on existing loans. The restrictions may also make it more difficult for Paytm's customers to repay their loans.
The RBI's decision is likely to have a negative impact on Paytm's employees. The company may be forced to lay off employees or reduce their salaries. The restrictions may also make it more difficult for Paytm to attract and retain new talent.
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