Ahead of the March 15 deadline by the Reserve Bank of India, Paytm’s parent company One97 Communications and major banking player Axis Bank are set to submit a key application with the National Payments Corporation of India this week, a Money Control report said on Monday. According to the report, Paytm and Axis Bank will meet NPCI officials regarding the joint application for the UPI operations. This would be an application for ‘third-party application provider,’ the Money Control report added. The meeting is said to take place this week, the report further said.
The National Payments Corporation of India is the regulatory authority for all UPI operations in the country. This meeting gains significance as the RBI deadline may also hamper the UPI transactions on Paytm app. The Money Control report also added that the NPCI may speed up the process so that lakhs of customers associated with Paytm, who use UPI on the app, don’t face any hassle.
Meanwhile, shares of Paytm’s parent company – One97 Communication – hit the 5% upper circuit to halt trading at Rs 358.35 after the central bank extended the deadline for wallet funds till March 15.
In a related development, the broking firm Jefferies expects a 28% decline in One97 Communication’s revenue in the financial year, which will in turn lead the company into cash burns. The brokerage house nullified the rating and target price on the company from underperform earlier till there’s any clarity.
Analysts at Bernstein said the deadline extension would help smoothly transfer Paytm Payments Bank accounts and said Paytm’s merchants being able to use the company’s QR codes, soundbox and card machines is a “major positive”. Citi analysts expects more banking partnerships, like the one with Axis, calling them “significant positives for ongoing business”. However, Citi kept its “sell” rating on the stock, while Bernstein maintained “outperform.”
(With inputs from Reuters)