The shares of One97 Communications Ltd (OCL), the owner of the Paytm brand, continued on its southward trajectory on Wednesday as it sank 10 per cent on reports of ED action.
The enforcement directorate (ED) has reportedly started a preliminary inquiry into Paytm Payments Bank Ltd (PPBL) to examine possible violations of Fema (Foreign Exchange Management Act) rules.
For the second consecutive session, the Paytm share was stuck at the lower circuit of 10 per cent. While it settled at Rs 342.15 on the NSE, it lost 9.99 per cent to close at Rs 342.35 on the BSE, a 52-week low.
ED is understood to have written to the Reserve Bank of India (RBI) seeking more details on the action taken by the banking regulator against PPBL, an associate of OCL Paytm Payments Bank Ltd
A Reuters report said that the agency is examining overseas transactions by PPBL.
Responding to clarification sought by the exchanges on the report, One97 said its associate does not undertake outward foreign remittance.
``OCL, its subsidiaries and its associate, PPBL have over time been receiving notices and requisition for information, documents and explanations from the authorities, including ED, concerning the customers that may have done business with the respective entities, and provided the required information, documents and explanations to the authorities. The company and its associate have continued to provide such information, documents and explanations to the authorities as is being required by them,’’ OCL said.
Earlier reports of the ED probing into possible violation of foreign exchange rules by Paytm were denied by the company.
In terms of volume, 1.56 crore equity shares of Paytm were traded on the NSE, while 16.04 lakh shares were traded on the BSE.
On Tuesday, its shares were also locked at the lower circuit after the RBI ruled out any review of its action against PPBL and a foreign brokerage sharply cut the target price on the stock.
The RBI is expected to come out with its frequently asked questions (FAQ) on the matter in a day or two. RBI governor Shaktikanta Das disclosed that the FAQ will assuage the concerns of customers and depositors of PPBL.
