Paytm Tanks 8% After RBI Revokes Payments Bank Licence

Shares of fintech major Paytm fell as much as 8.37% during the intraday trading today, touching a low of ₹1,051.05, after the RBI cancelled the licence of Paytm Payments Bank.

The stock later recovered and was trading 3.78% lower at ₹1,103.75 at 10:44 IST. The company’s market capitalisation stood at ₹70,552.8 Cr (about $7.4 Bn) at the time.

Despite the RBI’s move, brokerages remain largely positive on Paytm, with most analysts saying the development would have limited direct financial impact on the listed entity since the payments bank business had already been ring-fenced and written-off earlier.

Bernstein maintained an ‘Outperform’ rating with a target price of ₹1,500, calling the development an incremental negative but noting there would be no material financial impact since Paytm had already written-off its investment. 

It added that the move could potentially clear the way for Paytm to apply for an NBFC or PPI licence in the future.

Jefferies retained its ‘Buy’ rating with a target price of ₹1,350, saying the formal cancellation does not affect operations as the wallet business was already shut, UPI handles were transferred, and major agreements had been terminated, while all of Paytm’s services continue to remain operational.

Goldman Sachs maintained its ‘Buy’ call on Paytm but cut the target price to ₹1,400 from ₹1,470 earlier, saying the licence cancellation is an incremental negative but has no direct financial impact as Paytm Payments Bank was already ring-fenced, with customer and merchant sentiment remaining the key risk.

On Friday, the central bank cancelled the banking licence issued to Paytm Payments Bank Limited under Section 22(4) of the Banking Regulation Act, 1949, with immediate effect.

“Consequently, Paytm Payments Bank Limited is prohibited from conducting the business of ‘banking’ as defined in Section 5(b) or any additional business specified under Section 6 of the Banking Regulation Act, 1949 with immediate effect,” the RBI said in its circular.

This means the bank can no longer carry out any banking activity, and the RBI will also move the High Court to initiate winding up proceedings. The central bank said the bank has enough liquidity to repay all depositors during the winding-up process.

The RBI cited multiple reasons for the decision, saying the bank’s affairs were being conducted in a manner detrimental to the interests of both the institution and its depositors. It also flagged concerns around management and governance, saying its overall functioning was against public interest.

The central bank further said allowing the bank to continue would not serve any meaningful public purpose and noted that the company had failed to comply with conditions attached to its payments bank licence.

The move followed the RBI’s earlier restrictions in 2024 that had made Paytm Payments Bank largely inactive. After being barred from onboarding new customers in 2022 and from accepting fresh deposits in 2024, Paytm secured the TPAP licence from the National Payments Corporation of India in March 2024. Its subsidiary Paytm Payments Services Ltd later received a payment aggregator licence for offline and cross-border payments.

On the financial front, Paytm reported a net profit of ₹225 Cr in Q3 FY26 as against a net loss of ₹208 Cr in the year-ago quarter, while its revenue increased 20% YoY to ₹2,194 Cr. EBITDA stood at ₹156 Cr with a 7% margin, against a loss in the year-ago period. The company is yet to disclose its financial performance for Q4 FY26.

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