Influential traders body CAIT with 7 crore members has advised merchants relying on Paytm for accepting payments to migrate to alternative platforms following Reserve Bank of India’s clampdown barring new sign-ups or credits after February 28th. CAIT warned the sweeping compliance embargo has stirred uncertainty around continuity of financial services for thousands dependent daily.
It also cited enterprise value erosion with Paytm stock plunging over 40% in two sessions as a potential integrity flag necessitating protective steps shielding community funds possibly stuck as operational fate remains unclear presently.
Millions of Small Vendors Face Disruptions
CAIT leaders noted scores of modest proprietors, hawkers and small town sellers have adopted Paytm extensively for collecting payments minus realizing regulatory risks from concentrated exposure currently facing deactivation. This makes immediate route diversification imperative to avert income interruptions amid the platform upheaval.
Although RBI affirmed existing balances remain withdrawable, ability to receive payments critical for working capital needs stands severely curtailed from March 1st as things stand. And migration barriers to replacement options remain steep for many digital finance newcomers.
Paytm Refutes Money Laundering Allegations
Responding to charges, Paytm strongly denied formal money laundering probes against itself but remained non-committal regarding investigations against specific merchants over history. It however vowed addressing concerned authorities transparently whenever required.
Meanwhile, the firm continues engaging RBI urging urgent resurrection of its payments bank which reported exponential adoption until recent troubles surfaced from serious oversight gaps allowing compliance breaches.
