Paytm's stock rose more than 5% on Wednesday after it received approval to add new users to its UPI service. On the BSE, shares rose by up to 5.12%, reaching Rs 722.50.
According to the company, the National Payments Corporation of India (NPCI) has approved Paytm's onboarding of new UPI customers, subject to all procedural requirements and circulars being followed.
The decision is likely to provide respite to Paytm, which was hit earlier this year by the Reserve Bank of India's restrictions on affiliate business Paytm Payments Bank Limited (PPBL) in onboarding new UPI users on the Paytm app.
In March, the NPCI approved Paytm's participation in UPI as a Third-Party Application Provider (TPAP). The NPCI approved the company to continue UPI transactions with four banks: SBI, Axis Bank, HDFC Bank, and YES Bank.
Paytm informed the BSE late on Tuesday that it has acquired approval from the NPCI to onboard new UPI customers.
"We would like to inform you that, via letter dated October 22, 2024, the National Payments Corporation of India (NPCI) has granted approval to the company to onboard new UPI users, subject to all NPCI procedural guidelines and circulars," the Paytm filing stated, attaching the NPCI letter.
According to the letter, the approval is contingent on adherence to all NPCI procedural guidelines and circulars issued from time to time, including those issued specifically on risk management, brand guidelines for app and QR, multi-bank guidelines, TPAP market share, and customer data.
In addition, the company must follow the terms of the tri-party agreement with NPCI and PSP Banks.
According to the NPCI letter addressed to Vijay Shekhar Sharma, founder and CEO of One97 Communications, it has also been asked to "adhere to all laws and regulatory guidelines as applicable and issued from time to time, including Payments and Settlement Act 2007, Information Technology Act, 2000, Digital Personal Data Protection Act, 2023, and circular on Storage of Payment System Data, 2018".
While allowing One97 Communications (OCL) to onboard new users on its UPI application, the NPCI stated that it received a letter from the company on August 1 requesting approval for onboarding new UPI users on the Paytm app, which had been halted due to RBI directives dated January 31 and February 16.
"Upon examination of your request, we hereby accord our approval and permit One97 Communications Private Limited(OCL) to onboard new users on their UPI application," the Paytm filing stated, outlining the different restrictions.
The RBI directed Paytm Payments Bank (PPBL) on January 31 to suspend taking deposits or top-ups in any client accounts, wallets, FASTags, and other instruments, citing continuous non-compliance and ongoing substantial supervisory concerns.
