New Delhi: In early trade on Monday, the share price of digital payments giant Paytm witnessed a significant surge of 5%, triggering an upper circuit. One97 Communications Limited, the parent company of Paytm, saw its shares trading at Rs 428.10 per piece on the Bombay Stock Exchange (BSE).
The market excitement follows the Reserve Bank of India’s (RBI) guidance to the National Payments Corporation of India (NPCI) to evaluate Paytm’s request to function as a third-party application provider (TPAP) for unified payments interface (UPI) transactions.
In its official statement, the RBI conveyed, “NPCI has been advised by the RBI to examine the request of One97 Communication (OCL) to become a third-party application provider (TPAP) for UPI channel for continued UPI operation of the Paytm app, as per the norms.”
If approved, Paytm would be able to sustain its UPI operations, albeit requiring support from a newly identified set of banks.
However, Paytm Payments Bank Limited (PPBL) is facing constraints imposed by the RBI. Effective March 15, 2024, PPBL will no longer accept additional credits into its accounts and wallets.
The RBI’s directive aims to ensure uninterrupted digital payments via Paytm’s UPI handle (@paytm) and to mitigate risks within the UPI ecosystem.
One97 Communication, the entity behind the Paytm brand, holds a 49% stake in Paytm Payments Bank Ltd.
The RBI emphasized that the directive is aimed at ensuring seamless digital payments for UPI customers using the ‘@paytm’ handle (operated by Paytm Payments Bank) and reducing concentration risks within the UPI system.
