File.
| Photo Credit: Reuters

Shares of Paytm’s parent firm One97 Communications rallied 5% and touched upper circuit for the third straight session on February 20.

According to reports, the Directorate of Enforcement (ED), which has been probing One97 Communications’ arm Paytm Payments Bank Ltd (PPBL), has not found any breaches of the foreign exchange rules so far.

However, the reports said, the central agency has found certain lapses in know-your-customer (KYC) norms as well as issues around generation of suspicious transaction report.

Last week, ED had formally initiated a probe into overseas transactions by PPBL for allegedly flouting foreign exchange rules.

The scrip of crisis-hit fintech company surged 5% each to ₹376.45 and ₹376.25 apiece — its upper circuit limit — on the BSE and NSE.

The 30-share BSE Sensex benchmark gained 37.98 points or 0.05% to 72,746.14, while NSE Nifty rose 3.05 points to 22,110.60. On Monday, shares of One97 communications jumped 5%, hitting its upper circuit, after the company announced its collaboration with Axis Bank for the continuation of merchant settlements.

The move will allow continuity of Paytm QR, soundbox and card machine after the March 15 deadline set by the Reserve Bank of India (RBI) for shutting down operations of Paytm Payments Bank.

On Friday, shares of Paytm rose 5%, rebounding after three days of fall amid the company coming under the regulatory scanner for various violations related to its payments bank business.

One97 Communication stock has taken a beating on the exchanges this month after the RBI action.

As per the January 31 order, the RBI asked PPBL to stop further deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards, after February 29. The RBI later extended the deadline till March 15.

One97 Communications holds a 49% stake in PPBL but classifies it as an associate of the company and not as a subsidiary.

Paytm app is seen on a smartphone in this illustration image. File
| Photo Credit: Reuters

Traders’ body CAIT on February 4 issued a cautionary advisory to traders to switch from Paytm to other payment options for business-related transactions following RBI curbs on Paytm wallet and bank operations.

“The Reserve Bank of India has imposed certain restrictions, prompting CAIT to recommend that users take proactive measures to protect their funds and ensure uninterrupted financial transactions. Large number of small traders, vendors, hawkers and women are making payments through Paytm and as such RBI restrictions on Paytm could lead financial disruption to these people,” the Confederation of All India Traders (CAIT) stated.

Money laundering concerns and questionable dealings of hundreds of crores of rupees between popular wallet Paytm and its lesser-known banking arm had led Reserve Bank of India to clamp down on tech poster boy Vijay Shekhar Sharma-run entities, according to sources.

The central bank has ordered Paytm Payments Bank Ltd (PPBL) to halt most of its business including taking further deposits, conducting credit transactions and carrying out top-ups on any customer accounts, prepaid instruments, wallets, and cards for paying road tolls after February 29.

This means customers can access their existing deposits and pay for services with money stored in their wallets till February 29. And in case, RBI does not relent, top-up for Paytm wallet will stop and transactions through it would no longer can be carried.

CAIT Secretary General Praveen Khandelwal said that the recent restrictions imposed by RBI on Paytm have raised concerns about the security and continuity of financial services provided by the platform.

He emphasised the urgency of this advisory, urging traders to act promptly and make informed decisions to mitigate any potential adverse effects on their financial operations.