RBI asks NPCI to check if Paytm app can use UPI to continue operations
The RBI has emphasised that if NPCI grants TPAP status to OCL, a seamless migration of '@paytm' handles should occur from Paytm Payments Bank to a newly identified set of banks.
The Reserve Bank of India (RBI) has directed the National Payments Corporation of India (NPCI) to examine the request submitted by One97 Communication Ltd (OCL), the parent company of Paytm, to function as a Third-Party Application Provider (TPAP) for the Unified Payments Interface (UPI) channel.
The directive comes in light of the restrictions on Paytm Payments Bank, which is set to cease accepting further credits into customer accounts and wallets after March 15, 2024.
The RBI has emphasised that if NPCI grants TPAP status to OCL, seamless migration of '@paytm' handles should occur from Paytm Payments Bank to a newly identified set of banks.
This measure aims to prevent any disruptions in UPI operations.
Furthermore, the RBI has urged NPCI to ensure that no new users are added by OCL until all existing users are satisfactorily migrated to the new handle.
To facilitate the smooth migration process, NPCI is encouraged to certify 4-5 banks as Payment Service Provider (PSP) Banks, demonstrating the capability to handle high-volume UPI transactions.
This aligns with NPCI norms designed to minimise concentration risk in the UPI system, RBI stated.
For merchants utilising PayTM QR Codes, OCL is advised to open settlement accounts with one or more PSP Banks, excluding Paytm Payments Bank, to diversify the payment app providers and mitigate concentration risk, it added.
It is crucial to note that the migration of UPI handles applies exclusively to customers and merchants with a UPI handle '@Paytm.'
No action is required for those with UPI addresses or handles other than '@Paytm.'
Customers with accounts or wallets currently held by Paytm Payments Bank have been urged by RBI to make alternative arrangements with other banks well in advance of the March 15, 2024 deadline.
This aligns with guidelines provided by the RBI in FAQs released on February 16, 2024.
Additionally, holders of FASTag and National Common Mobility Cards (NCMC) issued by Paytm Payments Bank are advised to make alternative arrangements before March 15, 2024, to prevent any inconvenience.
All the measures outlined above are undertaken in the interest of safeguarding customers and the payment system from potential disruptions, without prejudice to any regulatory or supervisory actions initiated by the RBI against Paytm Payments Bank, the central bank added.
First Published: Feb 23, 2024 4:42 PM IST
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