Shares Of Paytm Hit Upper Circuit Again At Rs 428
The stock of the troubled fintech firm climbed to Rs 428.10 and Rs 427.95 apiece on the NSE and BSE, respectively, hitting its upper circuit limit
Shares of One97 Communications, the parent company of Paytm, saw a significant surge of 5 per cent in morning trading on Monday following the Reserve Bank of India's directive to the National Payments Corporation of India (NPCI). The RBI instructed NPCI to explore the feasibility of transferring Paytm Payments Bank customers, currently using the '@paytm' UPI handle, to other banking institutions.
The stock of the troubled fintech firm climbed to Rs 428.10 and Rs 427.95 apiece on the NSE and BSE, respectively, hitting its upper circuit limit. The positive momentum follows One97 Communications' recent rally on Friday, where its shares also surged by 5 per cent, reaching the upper circuit limit on the BSE.
The RBI's intervention aims to ensure stability within the payment ecosystem amidst concerns over Paytm Payments Bank's operational limitations. Following the RBI's directive, NPCI will assess the possibility of migrating '@paytm' UPI handle users to 4-5 alternative banks, mitigating risks associated with dependency on a single payment service provider.
In response to the RBI's actions, Paytm Payments Bank, facing restrictions on deposit acceptance and crediting after March 15, 2024, initiated additional measures to facilitate seamless digital transactions for UPI customers. The RBI said the importance of maintaining uninterrupted UPI operations while minimizing concentration risks within the system.
Moreover, the RBI has advised NPCI to consider One97 Communications' request to function as a Third-Party Application Provider (TPAP) for the UPI channel, enabling continued UPI operations through the Paytm app.
Concurrently, an advisory committee, chaired by former SEBI Chairman M. Damodaran, has been engaged by One97 Communications to address regulatory concerns and compliance issues. The committee is currently deliberating on its terms of reference and liaising with Paytm amid regulatory actions by the RBI.
On January 31, the RBI instructed Paytm Payments Bank Ltd to cease further deposit acceptance, credit transactions, and top-ups across various financial instruments. This directive, initially slated for February 29, was extended to March 15 by the central bank.
In response to regulatory pressures, Paytm announced the formation of an advisory committee led by Damodaran on February 9. The committee's mandate includes advising Paytm on compliance enhancements and regulatory matters, as the company navigates through regulatory challenges.
One97 Communications Ltd holds a 49 per cent stake in Paytm Payments Bank Ltd.
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