May 26, 2022

Paytm says the report that Payments Bank data was leaked to Chinese companies is “completely false and sensational” as the Indian fintech giant tried to provide an explanation to appease investors after its shares fell on Monday. From 14.7% to $8.6 apiece.

Bloomberg reported this afternoon that Paytm was unable to add new customers because it violated Indian rules by passing data to Chinese entities that indirectly held a stake in Paytm Payments Bank.

A Paytm spokesperson denied the report, stating that Paytm Payments Bank is “a local bank and fully complies with RBI data localization guidelines.”

The spokesman said: “All the bank data is in the country. We truly believe in the Digital India Initiative and are committed to helping expand financial inclusion in the country. I

The Reserve Bank of India, the country’s central bank, on Friday banned Paytm Payments Bank from accepting new customers, citing some “significant supervisory issues”.

“The bank has also been instructed to appoint an IT audit firm to conduct a comprehensive systems audit of its IT systems. Attracting new customers of Paytm Payments Bank Limited requires special permission, which RBI gives after reviewing the report of IT auditors, ”the RBI said in a statement.

Paytm, which has over 300 million users and operates multiple businesses, said it does not believe RBI’s actions “will have a material impact on Paytm’s business as a whole.”

Paytm shares fell 14.7% on Monday before posting a modest recovery. Paytm’s market capitalization at press time was $5.72 billion, compared to the $16 billion that helped the fintech startup raise money at the end of 2019.

Brokerage firm Macquarie Capital, whose analysts have been Paytm’s harshest critics, said the recent development is unlikely to have a major impact on the company’s business, but has the potential to “develop” into the smaller financial bank the company is capable of. Apply in May.

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