Synopsis
Paytm FDI Proposal Approved: Shares of fintech major Paytm surged up to 10% intraday on Friday following government approval of its foreign direct investment (FDI) proposal for the payment aggregator business. The financial services secretary announced that Paytm can now approach the Reserve Bank to seek the payment aggregator license, which will undergo further evaluation.
Shares of One 97 Communications (Paytm) will be in focus on Monday morning after the fintech major denied reports suggesting Enforcement Directorate (ED) was investigating the company and its founder and CEO in the money laundering case. Besides, a Bloomberg report suggested that the RBI was considering scrapping the license of Paytm Payments Bank as early as next month. Reports suggesting trader body CAIT advised traders to migrate from Paytm for other payment options would also keep the stock in news.
Stock exchanges have cut the price band for the stock to 10 per cent from 20 per cent, following the 36 per cent rout on the counter in the last two days.
“We would like to set the record straight and deny any involvement in anti-money laundering activities. We have and continue to abide by Indian laws and take regulatory orders with utmost seriousness,” Paytm said.
In a filing to stock exchanges, Paytm said neither the fintech player nor its founder and CEO are being investigated by the Enforcement Directorate regarding inter alia money laundering. In the past, Paytm said, certain merchants/users on its platforms were subject to enquiries and on those occasions, it cooperated with the authorities.
“During any such investigations by the authorities on any set of merchants/users in the past, we have cooperated with them on these investigations. This has been previously disclosed to the stock exchanges,” it said.
Paytm said there were media articles and stories on social media, which were spreading speculation
and misinformation on the reasons for RBI action on Paytm Payments Bank.
“The recent direction from RBI is a part of the ongoing supervisory engagement and compliance process. For this action, we refer our stakeholders to the official press release of RBI dated January 31, 2024 and not rely on unofficial sources. We are exploring all options to ensure that our stakeholders are protected from unwarranted and speculative stories,” it said.
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