Shares of One97 Communications, the parent company of Paytm, surged by 5% during morning trade on February 26 following the Reserve Bank of India’s directive to the National Payments Corporation of India (NPCI) to explore options for shifting Paytm Payments Bank customers with the ‘@paytm’ UPI handle to other banks.
The stock rose to ₹428.10 and ₹427.95 each on the NSE and BSE, respectively, hitting the upper circuit limit. Meanwhile, the broader market indices, BSE Sensex and NSE Nifty, experienced declines.
In response to potential disruptions in the payment ecosystem, RBI instructed NPCI to consider migrating ‘@paytm’ UPI handle users to four to five alternate banks. This move aims to facilitate seamless digital payments for customers post-March 15, 2024, when Paytm Payments Bank will cease to accept new deposits and credits.
The RBI emphasized the need to minimize risks and ensure continued UPI operations by allowing One97 Communications Limited to become a Third-Party Application Provider (TPAP) for the UPI channel.
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Furthermore, an advisory committee, led by former SEBI chairman M. Damodaran, established by One97 Communications in light of RBI’s actions, is actively engaged in discussions concerning its terms of reference. The committee’s focus is on advising Paytm regarding compliance enhancement and regulatory matters.
Previously, on January 31, the RBI directed PPBL to halt deposit, credit, and top-up transactions by February 29, later extending the deadline to March 15. In response, Paytm formed an advisory committee, led by Damodaran, to guide the company on regulatory compliance and strengthening measures. One97 Communications holds a 49% stake in PPBL.