Paytm received a preliminary nod from the Reserve Bank of India (RBI) for its issue prepaid payment products, including digital wallets. The approval comes as a major boost for the Indian fintech giant, as the company will be able to offer wallet services to customers after receiving the RBI's final authorisation. One97 Communications, the parent company of Paytm, said in an exchange filing.
The Paytm shares rose to a record high of 1,960 rupees per share post the development.
However, services will only be able to function as it is subject to Final authorisation. Principle authorisation does not allow PPSL to immediately launch wallet services.
Additionally, the services will be in compliance with the RBI's Master Directions on Prepaid Payment Instruments, dated August 27, 2021. These guidelines are being amended from time to time as well, the parent company said in an exchange filing.
Why Is It Good News For Paytm?
- Once RBI gives final approval, Paytm will be able to offer prepaid payment instruments, including wallets, to its customers.
- The approval is a big relief for the fintech company after its payment bank services were suspended two years back. RBI barred
- Paytm Payments Bank from accepting fresh deposits over regulatory non-compliance and supervisory concerns.
- The RBI move affected Paytm's wallet and UPI services as well; meanwhile, the latest approval comes as a sign of restarting wallet services.
Paytm Share Today
Paytm shares traded higher during the session on Friday. However, post the announcement, it rose to an intraday and record high at Rs 1,960, up 1.8 per cent from the previous close of Rs 1,925 on NSE.
In the last five sessions, the one97 Communications shares rose over 7 per cent, while the stock jumped over 13 per cent in a month. This year to date, the stock is up 50 per cent.
Disclaimer: This story is for informational purposes only. It should not be considered investment advice.