RBI hits Paytm Bank will it be able to make a comeback, or will it crash?


Yash Vora

2/14/20242 min read

When you work under the rules, you get a good reputation! But when you cross the limit, you have to pay up for the deeds. Something similar happened with Paytm at the start of February 2024. Paytm is an organization that was the first of the few to start with digital payments and one of the mega-companies that are today trusted by many people in different sectors of the economy. But what led to Paytm's downfall? Paytm, soon after their success in UPI, came up with the term 'Digital Bank', which was used to provide functions like a physical bank but everything in a digital space. The Reserve Bank of India, which is the central bank and Bankers Bank, said Paytm did not adhere to the rules and regulations laid down by the RBI; due to this, they had to shut down the Paytm Payment Bank. After this, it degraded Paytm's image and its subsidy, Paytm Payment Bank, in the minds of people, which affected their stock market numbers and recorded the lowest of the organization. Soon after that, the biggest investment company, Morgan Stanley, came into the picture by buying organizations at 0.8%. But it did not have much impact. It will be a tough time for Paytm to come back to the top again, as banks would be scared to be back with Paytm, as it would harm their reputation in the market and would be a riskier deal.
It will be great to see how Paytm decides their strategy with certain analysis as after February 29th, they have to shut down their payment bank, which is also their source for providing wallet functions to their users. In this manner, the RBI has proved it again with their strict eye on every organization coming into this sector to avoid any kind of mishap that may occur, like scams or any kind of fraud with consumers or users. Now the question is: how will Paytm handle this risk and stand up again? This will be an amazing challenge to see, with their downfall causing more speculation on their records and steps recently taken that state the possibility of a certain amount of fraud. If they come up, they must be more cautious and follow safety rules and regulations, ensuring consumer interest is protected in every manner with their banking customers having their money safely returned to them. Therefore, restoring trust in the organization from the customers' perspective will not be an easy task for the company. Henceforth, every organization should align and function by keeping certain rules and regulations in mind so that their future is never compromised or questioned.

Thank you.


Vansh Chaturvedi,

Kautilya, IBS Mumbai.