Digital payments firm Paytm said late on Wednesday its top management got a notice from ​India's markets regulator over the timing of ​its 2023 announcement curbing small personal loans following a ‌central bank clampdown.

Paytm's key management personnel, which include CEO Vijay Shekhar Sharma and CFO Madhur Deora, received the so-called show cause notice from the Securities and Exchange Board of India on Tuesday. They have 14 days to respond to the notice.

Here are some details:

The company, in a statement on December 6, 2023, said it would issue fewer sub-₹50,000 (about $525) personal loans, after the ‌Reserve Bank of India tightened rules on consumer lending.

Paytm's announcement led to a 20 per cent drop in its shares the next trading day.

About three weeks prior, the RBI had tightened rules for personal loans, in the form of higher capital requirements, amid concerns over a surge ​in small-value loans. Paytm shares fell about 1.9 per cent after the order before making ‌a recovery over the next few days.

However, in the eight days leading up to Paytm's December ​6 ‌announcement, its shares dropped about 12 per cent.

On Wednesday, Paytm said it ‌does not expect any financial impact from the show cause notice.

Sebi's show cause notice is meant to ‌seek ​responses from accused ​persons and entities in a probe. If upheld, they could face monetary penalties or restrictions under Indian ‌securities regulations.