Shares of One97 Communications, Paytm’s parent company, are witnessing a sharp rise on Wednesday, October 23, following major relief granted by the National Payments Corporation of India (NPCI) last night. The shares are marching above 9% already and are likely to see more gains with the passing hours. The NPCI approved Paytm to onboard new UPI users, subject to compliance with all procedural guidelines and circulars, providing a significant boost to the fintech company.
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This development comes after Paytm faced challenges earlier this year when the Reserve Bank of India (RBI) imposed restrictions on its associate company, Paytm Payments Bank Limited (PPBL), barring it from onboarding new UPI users. The approval from NPCI is expected to rejuvenate Paytm’s growth in the UPI ecosystem.
In March 2024, Paytm received NPCI’s approval to continue its participation in UPI as a Third-Party Application Provider (TPAP). The company was permitted to process UPI transactions through four banks: SBI, Axis Bank, HDFC Bank, and YES Bank.
Paytm must adhere to all regulatory requirements, including those outlined in the tri-partite agreement with NPCI and PSP Banks. The company is also required to comply with laws such as the Payments and Settlement Act, of 2007, the IT Act, of 2000, and the Digital Personal Data Protection Act, of 2023.
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The NPCI’s decision follows a request from Paytm in August to resume onboarding new UPI users. After careful examination, NPCI granted its approval, with certain conditions. Earlier this year, Paytm Payments Bank faced restrictions from the RBI due to supervisory concerns, affecting its ability to accept deposits and wallet top-ups.
