Today, the Indian multinational technology company Paytm has revealed that the report alleging its payments bank’s data leak to Chinese firms is completely false and sensationalizing.
Earlier Monday morning, the India fintech giant attempts to reassure investors after its stock dropped 14.7 percent to $8.6 per share.
Paytm has been prevented from adding new users, according to Bloomberg, because it broke Indian rules by enabling data to be shared with China-based firms that indirectly had an interest in Paytm Payments Bank.
In response to the news, a Paytm representative stated that Paytm Payments Bank is a homegrown bank that complies entirely with the RBI’s data localization directives.
Paytm’s founder and CEO, Vijay Shekhar Sharma, also rejected the claim on national television, saying that the RBI’s letter to Paytm Payments Bank makes no reference of any data access, server, or data access by any means, or servers being outside of India.
The Bank’s data, according to the spokeswoman, is kept entirely within the country. We are strong supporters of the Digital India program and will continue to work to increase financial inclusion in the country.
The Reserve Bank of India, the country’s central bank, stopped Paytm Payments Bank from taking on new customers on Friday, citing serious supervisory concerns.
The India fintech giant, which has over 300 million customers and operates a variety of companies, stated that it does not expect the RBI’s action will have a significant impact on its overall company.
Paytm’s stock dropped as much as 14.7 percent on Monday before recovering slightly. Paytm’s market worth was $5.72 billion at the time of publication, down from $16 billion when the fintech startup raised funds in late 2019.
The current revelation may lower Paytm’s prospects of upgrading to a small finance bank, which the company is entitled to apply for in May, according to brokerage firm Macquarie Capital, whose analysts have been the harshest critics of the company.