ED will probe Paytm Payments Bank if money laundering found, says revenue secretary

This comes after the Reserve Bank of India (RBI) ordered its banking arm to stop taking fresh deposits. The action was taken due to non-compliance with rules, which a source with knowledge of the matter said had stretched over years.

Paytm Payments Bank, which is 49% owned by Paytm, has been told to stop accepting deposits in its accounts or popular digital wallets from March.

It's unclear if Paytm will be able to find new banking partners for the 330 digital wallet accounts housed at Paytm Payments Bank. If Paytm doesn't, users will not be able to add more money to the wallets, which let customers to store money for retail payments.

Since the RBI's order on Wednesday, Paytm shares have lost 36% and were trading at 487.2 rupees on Friday morning, near record lows marked in 2022, and valuing the company at $3.7 billion.

Paytm CEO Vijay Shekhar Sharma took to social media to reassure users. "Your favourite app is working, will keep working beyond 29 February as usual," he said in a post on X. "For every challenge, there is a solution and we are sincerely committed to serve our nation in full compliance," Sharma added.

On Thursday, Bhavesh Gupta, president and chief operating officer of Paytm, said on a call that Paytm expects to get back to normalcy by March, "if not earlier". He added that the company had been holding discussions with the RBI and those have been on the "positive side".