Paytm shares rise 5% after board greenlights end to inter-company agreements with PPBL

Stock market news: shares of Paytm parent One97 Communications Ltd rose 4.99 per cent to an intray high of Rs 423.45 apiece on National Stock Exchange (NSE) on Friday, March 1, 2024. 

This comes after One97 Communications anunced discontinuation of various inter-company agreements with its associate entity, Paytm Payments Bank Limited (PPBL). decision was approved by Board of Directors on March 1, 2024, as per an exchange filing by company.

This development comes as part of Paytm and PPBL's efforts to bolster independent operations of PPBL and reduce dependencies between two entities. This decision aligns with Paytm's earlier anuncement of partnering with or banks and implementing measures to ensure seamless services for its customers and merchants.

“One 97 Communications Limited and its services, which include Paytm app, Paytm QR, Paytm soundbox, and Paytm Card machines will continue to work uninterrupted,” company said.

shares of One97 Communications were tring 3.72 per cent higher at Rs 418.30 apiece on NSE as of 10:30 am.

Reserve Bank of India (RBI) on January 31, 2024, barred Paytm Payments Bank from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, FASTags and NCMC card after February 29, 2024, in wake of persistent n-compliances and material supervisory concerns.

central bank said that action against PPBL came after a comprehensive system audit report and subsequent compliance validation report by external auditors. Paytm founder Vijay Shekhar Sharma stepped down as Paytm Payments Bank chairman earlier this week to enable a smooth transition as PPBL has moved to a new board structure consisting only of independent and executive directors. PPBL has also informed that it will commence process of appointing a new chairman.