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BENGALURU (Reuters) – The CEO of a beleaguered digital payments company has held talks with India’s finance minister and central bank on Wednesday after media reported that the company has met with India’s finance minister and central bank to try to resolve a regulatory crackdown on its payments banking business. , Paytm’s stock price rose by up to 10%.
Paytm stock rose to Rs 496.25 as the Reserve Bank of India (RBI), citing regulators, ordered Paytm Payments Bank to stop accepting new deposits into its accounts and popular digital wallets from March. It remained well below the level before January 31st. Concerns and rule violations.
Reports of talks with government and central bank officials surfaced on Tuesday, adding to the stock rally.
“Discussions are underway with both the RBI and the ministry to address regulatory concerns and compliance issues,” a person with direct knowledge of the discussions told Reuters on Tuesday.
The company has asked the RBI for an extension to the February 29 deadline, and has also sought clarification from the central bank regarding the transfer of licenses for its wallet business and digital highway toll payment service Fatag, the people said.
“The fact that the CEO has met with regulators gives investors some confidence,” said Kranti Bhatini, equity strategist at Wealth Mills Securities.
“While major compliance issues remain and it is unclear how the company will respond to future financial crises, the stock price has corrected significantly, which creates a buying opportunity,” Battini said. It is possible that there is,” he added.
The company’s stock is still trading about 24% below the median price target of 650 rupees among 14 analysts, according to LSEG data.
“Paytm’s payments operations are very large and we recognize that customers and merchants may be inconvenienced by a sudden suspension of payments banking operations, so we are able to ensure a smooth transition away from reliance on PPBL. We will strive to do so,” said Pranav Gundrapalle. , Bernstein Senior Analyst, mentions Paytm Payments Bank Ltd.
(Reporting by Chris Thomas in Bengaluru; Editing by Sonali Paul)
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