THIS AFTERNOON: RBI shuts down Paytm Payments Bank

Good afternoon, everyone, and happy Monday. We are kicking off the week with a light issue covering the cascading economic fallout from the regional conflict across real estate, trade, and energy.

The big story today is a deep dive into how war-driven downbeat sentiment is cooling Dubai’s real estate market, transforming Indian investors—the emirate’s largest overseas buyer base — from eager purchasers to cautious bargain hunters.

Plus: We take a close look at the mounting pressure on India's multi-bn-USD gems and jewelry sector, as the ongoing regional conflict fractures its critical trade corridor through Dubai.

MEANWHILE- India is pivoting heavily toward the US for its LPG imports as Gulf shipments plummet amid shipping disruptions — the oil shock has hit the core business of the country’s largest refiner, Reliance Industries, shaving 13% off its quarterly bottom line.

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BANKING — The Reserve Bank of India (RBI) has canceled the banking license of Mumbai-based digital bank Paytm Payments Bank, more than two years after imposing curbs for persistent non-compliance, according to a press release. The regulator said the bank’s operations were “detrimental” to depositors and public interest, adding it will seek its winding up through the courts.

Abu Dhabi Investment Authority was a notable anchor investor in parent firm Paytm’s USD 2.5 bn IPO back in 2021. In December last year, Paytm (One97 Communications) sold a 49% stake in its UAE subsidiary, Paytm Arab Payments, to Abbar Global Opportunities Holdings, owned by Mohamed Ali Rashed Alabbar, the founder of Emaar Properties.

What we know: Restrictions were first imposed in January 2024, when the bank was barred from accepting fresh deposits over failures in customer due diligence, fund flows, and technology systems. Since then, operations were limited to withdrawals and basic services.

Impact on parent company: The bank is backed by One97 Communications, which holds a 51% stake, with the rest owned by founder Vijay Shekhar Sharma. Paytm stated the licence cancellation will not materially impact its business, as the payments bank operated independently.

Why it matters: The Payments Bank license was designed to democratize deposits without the weight of a full banking license. The RBI’s decision reflects part of the declining relevance of payments banks amid the rise of UPI-based transactions and rising compliance costs, raising questions over the viability of the model.

ENERGY — India’s liquefied petroleum gas (LPG) imports from the US have surged as Gulf supply remains disrupted, Business Standard reports. Indian refiners had sourced about 361k tonnes from the US by 25 April, making it the largest supplier this month.

Meanwhile, shipments from traditional Gulf suppliers have plummeted. Imports from the UAE — India’s largest LPG source — fell 74% to 163k tons in April from 626k tons in February. Purchases from Qatar dropped nearly 80% this month compared to February, while Saudi Arabia fell 59%, and Kuwait plunged over 95%, the news outlet reports, citing Kpler data.

Why it matters: India’s efforts to diversify have yielded only marginal volumes from countries like Argentina and Chile due to limited global spare capacity. In the near term, replacing Gulf supply will remain difficult without stability in key shipping routes like the Strait of Hormuz. Supply disruptions have already hit consumption, with LPG demand declining in March as the government accelerated piped natural gas connections to reduce reliance on imports.

The big story abroad

While the latest developments from yesterday’s shooting at the White House correspondents’ dinner are dominating the front pages, a few other stories have caught our attention:

Our daily update on ceasefire negotiations: After the latest round of discussions between the US and Iran fell through, US President Donald Trump appears to have left the ball in Tehran’s court, saying Iran can reach out by phone to continue negotiations.

And in markets: Bullish sentiment over AI appears to have pushed equities to record highs. Since the outbreak of the regional war, 82 stocks, most of which are tied to the AI boom, have posted gains above 10%, which the Wall Street Journal attributed to investor confidence in data-center construction and infrastructure providers like Nvidia.

Speaking of AI: According to new reports, AI may end up costing businesses more than human labor, with computing costs exceeding salaries in some cases. Firms like Uber are seeing AI costs skyrocket, with some estimates placing global IT spending at USD 6.3 tn in 2026 — a 13% y-o-y jump.

In the (shrinking?) world of human achievement, Kenyan athlete Sabastian Sawe madehistory yesterday as the first runner to ever finish a competitive marathon in under two hours.

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