Following RBI Clarification On UPI Operation, Paytm Hits 5% Upper Circuit; Details

<p>The stock price of digital payments company Paytm increased by 5% in early trading on Monday morning, reaching an upper circuit. One97 Communications Limited, the parent company of Paytm, was trading 5% higher at Rs 428.10 a share on the Bombay Stock Exchange (BSE).</p>
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<p>This is in response to the National Payments Corporation of India (NPCI) receiving a recommendation from the Reserve Bank of India (RBI) to investigate Paytm’s application to be a third-party application provider for universal payments interface (UPI) payments.</p>
<p>In a statement, the RBI said that NPCI has been instructed to review One97 Communication’s (OCL) request to be included as a third-party application provider (TPAP) for the UPI channel in order to ensure that the Paytm app continues to operate using UPI in accordance with regulations.</p>
<p>If accepted, Paytm will be able to go on accepting payments via UPI, but it would need support from a number of recently discovered banks for the app.</p>
<p>Nonetheless, the RBI has placed limitations on Paytm Payments Bank Limited (PPBL).</p>
<p>PPBL will not be able to take any more credits into its wallets or accounts after March 15, 2024.</p>
<p>In order to reduce risks in the UPI system and guarantee seamless digital payments using Paytm’s UPI handle (@paytm), the RBI issued this guideline.</p>
<p>The Paytm brand’s owner, One 97 Communication, controls 49% of Paytm Payments Bank Ltd.</p>
<p>The RBI claims that the instruction was issued to reduce concentration risk in the UPI system and guarantee smooth digital payments for UPI users using the “@paytm” handle (run by the Paytm Payments Bank).</p>