India's Paytm CEO meets with RBI to discuss regulatory issues

Days after the Indian central bank placed restrictions on Paytm's banking affiliate, two sources said that Paytm Chief Executive Vijay Shekhar Sharma met with the bank to discuss strategies to address regulatory concerns.

Paytm shares were negatively impacted last Wednesday when the Reserve Bank of India (RBI) instructed Paytm Payments Bank to cease taking new deposits in its accounts and well-known digital wallets as of March. The RBI cited supervisory concerns and non-compliance with regulations.

According to one of the individuals, the company has requested an extension of the deadline of February 29, and talks have focused on addressing the regulatory issues raised by the RBI.

As per the source, Paytm has been requesting clarification from the RBI concerning the license transfer for both the wallet business and the digital highway toll payment service Fastag.

Another source claimed that the RBI did not commit to anything after hearing Paytm out.

An inquiry for comment was not answered right away by Paytm or the RBI.

Due to worries about the impact on Paytm's business, as Paytm Payments Bank powers most of the functions of the well-known digital payments app that competes with companies like Google and Walmart's PhonePe, Paytm shareholders have lost $2.5 billion as of Monday.

The news that India's federal anti-fraud agency was looking into whether the company's platforms had violated foreign exchange regulations caused the stock to drop to a record low early on Tuesday.

A Paytm representative dismissed the claims as baseless and inaccurately factual and denied any infractions of foreign exchange laws.

Paytm's stock, however, later surged as much as 8%, and as of just now, it was up 4.2% at 457 rupees.