Paytm Paytm Crisis: What did the Paytm crisis teach foreign investors? | Telugu News


Paytm Paytm Crisis : విదేశీ పెట్టుబడి దారులకు Paytm సంక్షోభం ఏం నేర్పింది
What Has The Paytm Crisis Taught Foreign Investors

Paytm Paytm Crisis : Companies from different countries of the world are looking towards India to invest. Post-Covid-19, many companies are coming to India instead of China. India is the only country where all resources are abundant. In a sense, India is a better country to invest than China. But, the challenges faced by India's largest financial technology company (Paytm) have shaken investors. Companies have an impact on market value.

Warren Buffett's Berkshire Hathaway brought Paytm together with China's Alibaba Group in 2016 after demonetisation, followed by mobile payments through digital money Paypal. Paytm parent One97 Communications also owns 49 percent stake in Paytm Payments Bank. Share price of One97, the parent company of Paytm, fell sharply in January due to RBI's decision.

Paytm is now in damage-control mode. Its founder Vijay Shekhar Sharma described the RBI order as a 'speed bump'. Paytm and Paytm Bank will move forward to resolve the concerns. But the company's market cap has fallen by as much as 15 percent of its value as uncertainty continues.

Modi government has zero tolerance for tax evasion and money laundering. This is affecting thousands of fintech companies. In a recent list of challenges facing doing business in India, the US International Trade Administration supports American businesses abroad.

One such move took place in August last year when India's Ministry of Commerce and Industry suddenly announced that permits would be required for the import of laptops and other personal-computing devices, making the process more burdensome. After the outcry, the government withdrew the new provision.

After demonetization in 2016, Paytm came into the limelight with digital money. Paytm promoted its digital wallet on the front pages of major newspapers. India has become synonymous with mobile payments. Paytm has around 100 million active users.

In 2017, Paytm Payments Bank started operations as a new type of bank in India. It is often intended to serve consumers to access financial services. Although it could not lend, it sold loans and other financial products from conventional banks and collected fees.

The RBI has focused on new ways to influence startups and established financial institutions, such as foreign credit-card issuers. In the past Paytm had flagged issues regarding customer due diligence at the bank. In the background of all this, the fine was imposed last year.

The government has tried hard to allay the concerns raised by Paytm startups. In February, 2024, Finance Minister Nirmala Sitharaman met with fintech companies. The ministry said Sitharaman has asked regulators, including the central bank, to meet startups on a monthly basis to express their concerns over regulation.

Following the developments, Paytm stopped the wallet services. Paytm not only transfers the cash in the wallet to the customer's bank accounts but also allows UPI transactions. After that the wallet was canceled by Paytm.

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