Payment services firm Paytm's shares, which had been languishing since the imposition of restrictions on the company's payments bank by the RBI that triggered heavy selling in the counter, jumped on Monday after the central bank granted Paytm Payments Bank 15 more days, till March 15, to stop accepting fresh deposits in its accounts or wallets. Paytm parent One97 Communications' shares jumped by as much as Rs 17.1, or five per cent, to get locked in the upper circuit at Rs 358.6 apiece on BSE, rising for a second straight day in a sigh of relief for investors after losing about 23 per cent of their value in the past three days.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

The RBI also advised Paytm Payments Bank customers as well as merchants to shift their accounts to other banks by March 15. 

 

On Friday, Paytm enrolled Axis Bank as a new banking partner aimed at sustaining some of its popular products as part of its efforts to address the current crisis.

The RBI extended full support to the bank's customers and said that customers at the entity will be able to withdraw their deposits even after March 15. Some of the customers including holders of salary account at the concern will need to chalk out for another bank going forward, the banking regulator said while addressing a host of FAQs on the matter.  

Fintech firm One97 Communications -- owner of the brand Paytm -- meanwhile said it has shifted its nodal account to Axis Bank from Paytm Payments Bank - a move that will allow continuity of Paytm QR, Soundbox, card machine after the March 15, deadline set by the central bank. The nodal account of Paytm is like a master account in which all its customers, merchant transactions are settled.

"After March 15, 2024, you will not be able to receive any such credits into your account with Paytm Payments Bank. It is suggested that you make alternative arrangements with another bank before March 15, 2024, to avoid inconvenience," said the RBI. Read more on RBI FAQs on Paytm Payments Bank

Analysts at Bernstein said the extension of the deadline would facilitate a "smooth transition" for transferring Paytm Payments Bank accounts, news agency Reuters reported.

Paytm shares have fallen 53 per cent since the RBI's January 31 order against Paytm Payments Bank that was triggered by what the central bank officials called persistent non-compliance with regulations. 

How brokerages view Paytm shares after the RBI FAQs on Paytm Payments Bank

Foreign brokerage Citi maintained a 'sell' rating on Paytm with a target of Rs 550 per share, which implies an upside of 61 per cent from the previous close.

According to the brokerage, the FAQs fail to offer clarity on the relationship between Paytm and Paytm Payments Bank. It also highlighted that devices that do no share any relationship with Paytm Payments Bank are not impacted.

Morgan Stanley retained its 'equal-weight' rating on Paytm with a target of Rs 555. 

With inputs from agencies

Catch the latest stock market updates here. For all other news related to business, politics, tech and auto, visit Zeebiz.com.