Paytm’s stock gained strong momentum on Wednesday, August 13, after the Reserve Bank of India (RBI) granted an in-principle approval to its subsidiary, Paytm Payments Services Ltd. (PPSL), to function as an online payment aggregator.
The approval marks a significant development for PPSL, a wholly-owned arm of One97 Communications, as it can now resume onboarding new merchants — a process that had been under RBI’s freeze since November 2022.
Stock Soars Over 6%
Following the news, Paytm’s share price surged as much as 6% to ₹1,186 in Wednesday’s trade. The rally also extends the company’s strong performance over the past month, with shares rising more than 17% during the period.
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Conditions with Approval
While lifting the curbs, the RBI has directed PPSL to conduct a comprehensive system audit, which will also include a cybersecurity review.
The regulator has set a six-month deadline for submitting this audit report. If the company fails to comply, the provisional approval will automatically lapse, and the application for a final licence will not be considered.
Significance for Paytm
This in-principle nod from the RBI is crucial for Paytm’s payments business, as merchant onboarding is a core part of its operations. The resumption of this process could help boost transaction volumes and merchant partnerships going forward.
