After RBI's strictness, Paytm took a big step, will cut down on small loans, share fell by 20 percent

After RBI's strictness, Paytm took a big step, will cut down on small loans, share fell by 20 percent

Paytm: After the tightening of personal loan rules by the Reserve Bank of India, Paytm has taken a big decision regarding small personal loans. Paytm is now going to reduce the number of personal loans for less than Rs 50,000. The company has given this information on Wednesday. It is noteworthy that after the strictness of RBI, a huge reduction of up to 50 percent can be seen in the number of small loans of Paytm.

There will be no big impact on the company – Paytm

On this decision, Paytm believes that there will not be much impact on the company's earnings and margins because there is a lot of potential in loans of more than Rs 50,000. Recently, the Reserve Bank of India has tightened the rules related to personal loans. RBI increased the risk weight of small loans by 25 percent and it has increased from 100 percent to 125 percent. After this decision of the Central Bank, personal loans will become expensive and companies like Paytm have been forced to reduce the number of unsecured personal loans.

Paytm shares boomed

After Paytm's decision to reduce the number of small amount unsecured personal loans, the company's shares have taken a hit in the stock market on Thursday. Shares of One97 Communications, the parent company of digital payments firm Paytm, fell by 20 percent on December 7. After this, lower circuit occurred on it at 9.23 minutes. 

Company's earnings will be affected

Brokerage firm Jefferies said that Paytm's Buy Now Pay Later business is going to be directly affected after RBI's decision to tighten the rules of small personal loans. Among the loans issued by the company, the share of small personal loans is 55 percent. In this, the company will reduce up to 50 percent in the next 3 to 4 months. Jefferies has also cut the company's revenue estimates by 3 to 10 percent.

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