Paytm shares tank 10% to extend losses for second day

New Delhi, Shares of Paytm's parent company One97 Communications tanked 10 per cent on Wednesday after reports claimed that a preliminary inquiry has been started against subsidiary Paytm Payments Bank Ltd for alleged FEMA violations. Falling for the second straight day, Paytm shares dived 10 per cent to settle at the lower circuit limit of Rs 342.15 apiece on the NSE.

On the BSE, shares of the crisis-hit fintech company tumbled 9.99 per cent to close at Rs 342.35 per piece. The stock also hit its 52-week low on both BSE and NSE.

As per the market reports, the Enforcement Directorate (ED) has initiated an preliminary inquiry against Paytm Payments Bank Ltd, under the Foreign Exchange Management Act (FEMA).

Additionally, the ED and Financial Intelligence Unit (FIU) have also sought inputs from Reserve Bank of India (RBI), the reports said.

In terms of volume, 1.56 crore equity shares were traded on the NSE, while 16.04 lakh shares were traded on the BSE, during the day.

The 30-share Sensex benchmark jumped 267.64 points or 0.37 per cent to close at 71,822.83 points, while NSE Nifty rose 0.45 per cent to settle at 21,840.05 points.

On Tuesday, shares of One97 Communications, tanked 10 per cent on the exchanges after RBI ruled out any review of the central bank's action against Paytm Payments Bank Ltd (PPBL), saying that its decisions are well thought out.

While announcing the action against PPBL, RBI had said the direction follows persistent non-compliances and continued material supervisory concerns.

Regarding the action taken against PPBL, RBI Governor Shaktikanta Das on Monday said, it is not against any fintech but its prime objective is to protect the interest of customers and depositors.

The directives against any regulated entities are taken whenever it finds that they don't take any action even after they are told to comply with the regulations, Das added.

In a major action against PPBL, the central bank, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags, and other instruments after February 29.

One97 Communications holds a 49 per cent stake in PPBL but classifies it as an associate of the company and not as a subsidiary.