Paytm recoups 13% from record low on Axis Bank pact, RBI deadline extension

Paytm said it has shifted its nodal account to Axis Bank from Paytm Payments Bank to ensure continuity and seamless merchant settlements

Shares of One97 Communications (OCL), parent of fintech major Paytm were locked in the 5 per cent upper circuit for a second straight day on BSE at Rs 358.55 on Monday.

This came after the Reserve Bank of India (RBI) in its FAQ announced extending the deadline for restrictions on deposit and credit transactions of Paytm Payments Bank (PPBL) to March 15. 

It also said that Paytm QR, soundbox, card machine will continue to work beyond March 15 for merchants, whose accounts are linked with banks other than Paytm Payments Bank.

Merchants, however, cannot transact after March 15 if the QR code, PoS, and sound box are linked to PPBL. 

Paytm has also forged a partnership with Axis Bank. It said it has shifted its nodal account to Axis Bank from Paytm Payments Bank to ensure continuity and seamless merchant settlements. 

With today’s gain, the share price of OCL has recouped 13 per cent from its record low of Rs 318.35 touched on February 16.

A combined 1.1 million shares changed hands and there were pending buy orders for a combined 10.6 million shares on the NSE and BSE, data shows.

Since, February 1, the stock price of Paytm had tanked 58 per cent after the RBI ordered Paytm Payments Bank to bar most of its businesses, including deposits, by February 29.

"The arrangement with Axis Bank is expected to seamlessly replace the nodal account that OCL was using with Paytm Payments Bank", Paytm said.

Paytm Payment Services Ltd (PPSL), OCL’s wholly owned subsidiary has already been using the Axis Bank services, since its inception.

Consumer payments for merchant transactions are typically collected in a dedicated account. This arrangement enables Paytm to seamlessly transition its merchants’ settlements to Axis Bank, thereby facilitating business operations for the merchants, it added.

Meanwhile, according to data analysed by Business Standard, the curbs on Paytm Payments Bank may have limited impact as around 90 per cent of Paytm UPI app users have their accounts linked with other banks. CLICK HERE FOR FULL STORY 

Meanwhile, in an exchange filing, the company said last week it has been receiving notices and requests for information, documents and explanations from authorities including Enforcement Directorate (ED), with respect to the customers that may have done business with the respective entities, and provided the required information, documents and explanations to the authorities.

The company and its associate have continued to provide such information, documents and explanations to the authorities as is being required by them, it added.

The company further clarified that its associate Paytm Payments Bank Limited does not undertake Outward Foreign Remittance.