Shares of Paytm parent One97 Communications Ltd (OCL) hit 5% upper circuit limit in opening trade on Friday after the company got a nod from the National Payments Corporation of India (NPCI) to participate in UPI services as a third-party application provider (TPAP) under multi-bank model. The approval came just a day before the Reserve Bank of India’s (RBI) deadline for imposing business restrictions on Paytm Payments Bank (PPBL) of March 15, 2024.
Snapping four sessions losing streak, Paytm shares rose 5% to hit a high of ₹370.9 in the opening trade against the previous closing price of ₹353.25 on the BSE. The fintech stock has lost 12.5% in the previous four sessions.
The share price of Paytm has tumbled over 51% from ₹761 at the close of trade on January 31, 2023, after the RBI stopped PPBL from taking new customers with immediate effect, while barring the company from taking further deposits or credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29. The market capitalisation of the fintech company has dropped by ₹24,825 crore to ₹23,567 crore (today), from ₹48,336 as on January 31, 2024.
One97 Communications shares got a boost today after the NPCI on Thursday approved Paytm to continue offering Unified Payments Interface (UPI) services to its app users. Four banks — Axis Bank, HDFC Bank, State Bank of India, YES Bank — will act as payment system provider (PSP) banks to Paytm parent One97 Communications. YES Bank will also be acting as merchant acquiring bank for existing and new UPI merchants for OCL.
“@Paytm” handle shall be redirected to YES Bank. This will enable existing users and merchants to continue to do UPI transactions and AutoPay mandates in a seamless and uninterrupted manner,” the Vijay Shekhar Sharma-led fintech says in a statement released overnight.
As per the release, OCL has been advised to complete migration for all existing handles and mandates, wherever required, to new PSP banks at the earliest.
On January 31, 2024, the RBI imposed severe business restrictions on PPBL, asking the payment aggregator to stop onboarding new customers with immediate effect. The central bank barred PPBL from taking further deposits or credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29. Later, the RBI extended the deadline by 15 days to March 15, keeping in view the interest of customers (including merchants), who may require a "little more time" to make alternative arrangements.
Meanwhile, Paytm QR codes, Soundbox, and card machines will remain fully operational beyond March 15. Adding to it, all other services on the Paytm app, including movies, events, travel (metro, flight, train, bus) ticket bookings, and more, will also continue to work.
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