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Updated February 26th, 2024 at 10:31 IST

Paytm shares soar as RBI nudges NPCI to review TPAP request

If NPCI greenlights Paytm's TPAP status, the transition would involve migrating '@paytm' handles seamlessly from PPBL to a newly identified consortium of banks.

Reported by: Business Desk
Paytm
Paytm | Image:Paytm/Facebook
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Paytm share price: The shares of Paytm parent One97 Communications surged 5 per cent today to hit the upper circuit of Rs 428.10 apiece on the NSE after the Reserve Bank of India (RBI) directed the National Payments Corporation of India (NPCI) to evaluate Paytm's request to operate as a third-party application provider (TPAP) for unified payments interface (UPI) transactions. This development comes amid regulatory adjustments impacting the operations of Paytm Payments Bank Limited (PPBL).

The RBI's statement highlights the necessity for NPCI to scrutinise One97 Communication's plea for TPAP status to sustain UPI operations within the Paytm app ecosystem. This move follows the RBI's previous decision to restrict PPBL from accepting further deposits or top-ups in customer accounts, wallets, and other instruments after March 15, 2024, due to persistent non-compliances.

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If NPCI greenlights Paytm's TPAP status, the transition would involve migrating '@paytm' handles seamlessly from PPBL to a newly identified consortium of banks, ensuring uninterrupted UPI services for existing users. To mitigate concentration risks in the UPI ecosystem, the RBI recommends accrediting four to five banks with robust capabilities to handle high-volume UPI transactions.

The regulatory mandate underscores the broader imperative for diversification within India's digital payment landscape, aiming to foster competition and resilience. Presently, there are 22 NPCI-approved third-party UPI apps, including industry giants like Amazon Pay, Google Pay, PhonePe, and Whatsapp, contributing to the burgeoning digital payments ecosystem in the country.

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Published February 26th, 2024 at 10:31 IST

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