In a recent assessment, brokerage firm Bernstein has assigned an ‘Outperform’ rating to Paytm, along with a target price of ₹600 per share, as per an ET Now report.
As per the brokerage, the Reserve Bank of India’s (RBI) actions are directed primarily at Paytm Payments Bank (PPBL), with no intention to disrupt other integral functions of Paytm. This distinction is crucial in understanding the scope of regulatory measures impacting the company.
It added that the linking of merchants’ operations to a non-PPBL bank is a “major positive”, which carries significant benefits for Paytm. Bernstein further acknowledged the extension of the cut-off date to March 15, which provides Paytm with a larger window to implement necessary changes in response to regulatory requirements.
On the negative side, Bernstein pointed to a lack of action concerning the bulk transfer of wallets and FASTags to another bank. This limitation could pose challenges for Paytm in managing certain aspects of its financial operations.
RBI extends Paytm Payments Bank transaction curb deadline
The RBI extended till March 15 the deadline for stopping deposit transactions at PPBL, part of One 97 Communications that runs the digital payments firm Paytm.
The central bank said the extension is in the public’s best interest and aims to accommodate the needs of the payments bank’s consumers and merchants who may need more time to make alternative arrangements.
The RBI on January 31 directed PPBL to stop accepting deposits or top-ups in customer accounts, wallets, FASTags and other instruments after February 29, citing large-scale non-compliance with regulations and supervisory concerns.
“No further deposits or credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after 15 March (extended from the earlier stipulated timeline of 29 February), other than any interest, cashback, sweep in from partner banks or refunds which may be credited anytime,” RBI said on Friday.
Separately, the RBI said merchants or businesses accepting payments using a Paytm QR code, Paytm soundbox or Paytm PoS (point-of-sale) terminal can continue to use it even after March 15, if their receipt and transfer of funds is linked to a bank account, other than PPBL.
However, the deadline to close nodal accounts of One97 Communications and Paytm Payments Services maintained by Paytm Payments Bank has not been extended.
Paytm shifts nodal account to Axis Bank
Meanwhile, One97 Communications in a regulatory filing said that it has shifted its nodal account to Axis Bank, by opening an escrow account, to ensure “seamless merchant settlements as before.”
“This arrangement is expected to seamlessly replace the nodal account that OCL (One97 Communications) was using with Paytm Payments Bank. Paytm Payment Services Ltd (PPSL), OCL’s wholly owned subsidiary has already been using the Axis Bank services, since its inception,” the statement said.
Paytm app, and devices like Paytm QR, Soundbox, and Card Machine will continue to work as always, the statement said citing a spokesperson.
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Published: 17 Feb 2024, 02:32 PM IST