Following the Reserve Bank of India's (RBI) latest directive imposing restrictions on Paytm Payments Bank last week, a significant shift in payment app usage has been observed among kirana stores across India. According to a survey conducted by Kirana Club released on Thursday, 42 per cent of local kirana stores have already shifted to other mobile payment applications since the announcement on January 31. Additionally, 20 per cent of respondents expressed their intent to switch to alternative payment apps.
The survey, which polled 5,000 respondents, highlighted a notable decline in trust among Indian kirana stores towards Paytm. As per the surevy, before the RBI announcement, 69 per cent of kirana retailers depended on the PayTM QR code. However, following the ban, sentiments have shifted significantly. About 68 per cent expressed a decrease in trust in the platform.
Among the kirana retailers surveyed, 50 per cent have opted for PhonePe as their preferred alternative payment app, followed by 30 per cent favouring Google Pay, and 10 per cent opting for BharatPe.
The RBI's decision, announced on January 31, prohibits Paytm Payments Bank from accepting further deposits effective February 29. In a press conference following the monetary policy committee meeting on Thursday, RBI Governor Shaktikanta Das clarified that the action against Paytm Payments Bank stemmed from compliance issues rather than regulatory concerns.
Deputy Governor of RBI, Swaminathan J, on Thursday in the post-MPC news conference elaborated that several bilateral discussions had taken place between Paytm and the RBI before the decision was made, emphasising that the restriction does not affect the Paytm app itself.
After a two-day relief, shares of One97 Communications Ltd, the parent firm of Paytm, plunged by 10 per cent to hit lower circuit limit on Thursday.
Despite a firm beginning, the stock tanked 9.99 per cent to Rs 447.10, its lower circuit limit, on the BSE. On the NSE, it tumbled 9.99 per cent to Rs 446.65, its lowest trading permissible limit for day. Paytm's market valuation eroded by Rs 3,153.18 crore to Rs 28,394.44 crore.