Paytm Share Price Surge 5% After Discontinuing Inter Company Pacts with PPBL

Paytm Share Price Surge 5% After Discontinuing Inter Company Pacts with PPBL
Paytm Share Price Surge 5% After Discontinuing Inter Company Pacts with PPBL

by Tanushree Jaiswal Last Updated: Mar 01, 2024 - 10:14 pm 454 Views
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At 2.25 pm today, shares of One97 Communications the parent company of the renowned Paytm brand surged by 5% reaching ₹423.45. This increase in Paytm shares follows the company's recent announcement regarding the discontinuation of certain agreements with its associate entity Paytm Payments Bank. This move aims to reduce dependencies and streamline operations signaling strategic adjustments in response to regulatory scrutiny.

Discontinuation of Inter Company Pacts

One97 Communications disclosed its decision to discontinue various inter company agreements with PPBL in a filing with the BSE. This step approved by the Paytm board highlights the company's commitment to enhancing efficiency and governance. PPBL shareholders have agreed to simplify the Shareholders Agreement supporting efforts to strengthen governance practices within the organization.

Reserve Bank of India has been closely monitoring the payment aggregator due to concerns regarding noncompliance with regulations. Notably, the company's recent actions aim to address these concerns and foster compliance with regulatory standards.

Market Response

Although Paytm shares have risen from their lowest point of ₹318 on 16 February they are still around 50% lower than the closing price of ₹761.20 on January 31st.This trend reflects investors' cautious optimism amidst ongoing regulatory challenges, market response to today's developments indicates confidence in the company's strategic direction.

Despite regulatory pressures Paytm reassures customers and merchants of uninterrupted services. Paytm affirms that essential services including the Paytm app, Paytm QR, Paytm soundbox and Paytm Card machines will remain operational beyond the RBI's March 15 deadline. By securing partnerships with other banks such as the recent agreement with Axis Bank Paytm demonstrates its commitment to sustaining service excellence.

Recent resignation of Vijay Shekhar Sharma from his position on PPBL's board highlights ongoing efforts to reinforce corporate governance structures. Paytm is making changes to agreements and operations to address regulatory issues showing its commitment to transparency and accountability.

Read Paytm Share Price Surge 5% for Third Consecutive Day

Final Words

One97 Communications' strategic decisions to discontinue inter company agreements with PPBL and streamline corporate governance practices mark significant steps in response to regulatory scrutiny. As the company navigates challenges it remains committed to ensuring uninterrupted services for its vast customer base. Paytm's proactive approach highlights its resilience and determination to uphold regulatory compliance while driving sustainable growth in the evolving fintech landscape.

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About the Author

Tanushree is a seasoned professional with 6 years of experience in the Fintech and Edtech industry.

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