Troubled Indian fintech Paytm has endured another double-digit drop in its share price amid the Reserve Bank of India crackdown. For the third day in a row, trading in Paytm was halted after the share price fell by the regulatory limit placed on daily trades by the local exchange.

The result is that Paytm’s market cap is now below the $3.4bn valuation when Ant Financial invested in 2015. The Paytm market cap is down by 40% in the past week. The market cap was around $20bn at the time of the IPO.

Paytm licence reportedly under threat

Paytm is under pressure after the central bank noted multiple transactions beyond regulatory limits. In turn, this raised money-laundering concerns. On 31 January, the Reserve Bank of India issued an order banning Paytm bank from taking deposits or allowing top-ups after 29 February. The regulator is also reportedly considering scrapping the licence of Paytm Payments Bank.

In the past two years, the regulator has questioned dealings between Paytm’s banking arm and its payments app.

More than 20 million merchants and businesses are powered by Paytm to accept payments digitally. According to Paytm, more than 300 million Indians use Paytm to Pay at local stores.

Paytm founder fights back

Paytm founder & CEO Vijay Shekhar Sharma, said: “Let’s clear the air and get the facts right.  Our Paytm app and its services continue to remain operational. Most of the services offered by Paytm are in partnership with various banks and not just our associate bank – Paytm Payments Bank Limited. We have always been at the forefront of the digital revolution backed by our large army of merchants and consumers.

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Our merchant payment services will not be impacted. Paytm’s offline merchant payment network offerings like Paytm QR, Paytm Soundbox, Paytm Card Machine, will continue as usual, where it can onboard new offline merchants as well.

We started our journey of working with other banks over the last two years, which we will now accelerate. The next phase of our journey is to continue to expand our payments and financial services business, only in partnerships with other banks.”