Paytm (parent company, One97 Communications Limited) shares have increased by 5% after receiving approval from the National Payment Corporation of India (NPCI) to operate as a Third-Party Application Provider (TPAP) under the multibank model for UPI, as per the Paytm’s regulatory filing.

This approval has come as a relief for Paytm, and while it is a positive move.

Paytm will be partnering with four banks, namely Axis Bank, HDFC Bank, State Bank of India Ltd, and Yes Bank, for its UPI business.

The four banks will act as Payment System Provider (PSP) banks, and Yes Bank will be the merchant acquiring bank for existing or new UPI merchants.

For seamless and uninterrupted transactions, the “@Paytm” handle will be redirected to Yes Bank, enabling existing users and merchants to continue doing UPI transactions and AutoPay mandates.

One97 Communications Limited (OCL) has been advised to complete the migration for all existing handles and mandates, wherever required, to new PSP banks as soon as possible.

One can either utilise the existing balance on their FASTag/NCMC card or choose to close the card and request a refund from Paytm Payments Bank.

The Paytm app can be used for bill payments and recharges, and Paytm QR, Soundbox, and Card Machine will continue to work. One can withdraw or transfer money until the existing balance is available in the wallet.

Deposits will not be allowed after March 15, 2024, but refunds and cashback will still be credited. RBI has restricted accepting new deposits or allowing credit transactions after March 15, 2024, but the existing balance can still be withdrawn.

At 2:07 pm, the shares of OCL hit an upper circuit of 5% and were trading at Rs 370.70 on NSE.