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Home News Paytm Shares Surge 5% Following Approval for New User Onboarding

Paytm Shares Surge 5% Following Approval for New User Onboarding

by Barbara

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.

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The National Payments Corporation of India (NPCI) approved Paytm’s request for new client onboarding in August, with the official announcement coming on Tuesday.

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“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.

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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.

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