Paytm again touches upper circuit at Rs 428, rising by 5%

New Delhi: Shares of One97 Communications, the parent company of Paytm, rose by 5% in early Monday trading after the Reserve Bank of India asked the retail payment settlement body NPCI to investigate the possibility of moving Paytm Payments Bank customers who use the '@paytm' UPI handle to other banks. 

The stock of the fintech company, which has been in crisis recently, rose by 5% each to Rs. 428.10 and Rs. 427.95 on the NSE and BSE, respectively, which is also the upper circuit limit. Meanwhile, the 30-share BSE Sensex benchmark fell 0.39% or 288.71 points in morning trade, while the NSE Nifty fell 71.55 points to 22,141.15. 

On Friday, One97 Communications' stock surged 5% and was locked in the upper circuit limit on the BSE.

In a bid to prevent any disruptions in the payment ecosystem, the Reserve Bank of India (RBI) on Friday asked the National Payments Corporation of India (NPCI) to examine the possibility of migrating Paytm Payments Bank customers using the UPI handle '@paytm' to 4-5 other banks.

The central bank came out with additional steps for the benefit of customers, wallet holders and merchants who are availing banking services from Paytm Payments Bank, which has been barred from accepting deposits and credits after March 15, 2024.

As the PPBL cannot accept further credits into its customer accounts and wallets after March 15, 2024, certain additional steps have become necessary to ensure seamless digital payments by UPI customers using '@paytm' handle operated by the bank, and minimise concentration risk in the UPI system by having multiple payment app providers, the RBI said in a statement.

"NPCI has been advised by the RBI to examine the request of One97 Communication Ltd (OCL) to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app, as per the norms," it said.

Meanwhile, an advisory committee, set up by One97 Communications after the Reserve Bank's action on its payments bank business, is at a stage of engagement with the company on matters related to the terms of reference for the panel.

The panel's head and former chairman of Sebi M Damodaran on Sunday said, "We have been engaging with the group on matters relating to the Advisory Committee's terms of reference."

He said that the panel members are external advisors and at present Paytm is engaged in dealing with the RBI

On January 31, the Reserve Bank of India directed Paytm Payments Bank Ltd (PPBL) to halt any further deposits, credit transactions, or top-ups in all customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards after February 29. Subsequently, the central bank extended the deadline to March 15.

On February 9, Paytm announced the establishment of a group advisory committee led by Damodaran. The objective of the committee is to provide guidance on strengthening compliance and regulatory matters to the company.

One97 Communications Ltd (OCL) holds a 49 per cent stake in PPBL.