Paytm shares surge 5% as Axis Bank steps in for merchant settlements amid RBI compliance woes
NEW DELHI: Shares of One97 Communications -- owner of the brand Paytm -- jumped 5 per cent in the morning trade on Monday after the crisis-hit fintech company's decision to collaborate with Axis Bank for the continuation of merchant settlements.
Extending its gains in the second consecutive session, the stock of the company climbed 5 per cent each to Rs 358.55 and Rs 358.35 apiece -- also its upper circuit limit -- on the BSE and NSE, respectively.
In the morning trade, the 30-share BSE Sensex benchmark gained 185.81 points or 0.26 per cent to 72,612.45, while NSE Nifty rose 0.32 per cent to 22,110.60 points.
In a regulatory filing on Friday, One97 Communications said it has shifted its nodal account to Axis Bank from its arm Paytm Payments Bank.
The move will allow continuity of Paytm QR, soundbox, card machine after the March 15 set by the Reserve Bank of India, the filing said.
The RBI has advised customers and merchants of Paytm Payments Bank Ltd (PPBL) to shift their accounts to other banks by March 15, giving 15 more days to the beleaguered entity to close most of its operations, including deposit and credit transactions, it added.
On Friday, shares of Paytm rose 5 per cent, rebounding after three days of fall amid the company coming under the regulatory scanner for various violations related to its payments bank business.
After the Reserve Bank of India action against PPBL for certain violations, the Enforcement Directorate (ED) is looking into alleged violations by the entity.
Paytm shares have been witnessing intense selling pressure this month after the RBI action.
As per a January 31 order of the central bank, PPBL was asked to stop further deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards, after February 29.
One97 Communications holds a 49 per cent stake in PPBL but classifies it as an associate of the company and not as a subsidiary.