Shares of Paytm experienced a 5% increase on Wednesday after India’s payments regulator announced that the fintech company is now permitted to onboard new users for its essential digital payments service. This development lifts a significant burden that has been in place since a central bank-ordered ban affected its banking operations.
The Reserve Bank of India (RBI) had shut down Paytm’s banking unit in January due to ongoing compliance issues, resulting in a sharp decline in its monthly transacting users (MTU), which fell from 100 million in the previous quarter to 70 million in the September quarter.
The National Payments Corporation of India (NPCI) approved Paytm’s request for new client onboarding in August, with the official announcement coming on Tuesday.
“NPCI’s approval for new client onboarding significantly paves the way for the revival of MTUs,” stated Rahul Jain, vice president of research at Dolat Capital.
Prior to this announcement, Paytm shares had seen a decline of approximately 10% since the RBI’s clampdown on January 31. This included a 5% drop on Tuesday, following the company’s second-quarter results, which indicated only a modest slowdown in its revenue decline as its digital payments user base continued to shrink.
Related topics:
