RBI clears air on Paytm UPI handles; Says that users can continue to use after migrating to other banks

The RBI has directed the NPCI to process the application of One97 Communication Ltd. to judge.

Mumbai: In its latest directive, the Reserve Bank of India has issued instructions to the National Payments Corporation of India to process the application filed by One97 Communication Ltd. to be assessed carefully. Behind issuing this directive, the aim of the central bank is to give this company the opportunity to become an international bank. External application provider for the UPI channel. All this is in a bid to maintain stable and smooth functioning of the Paytm app, according to a report by news agency ANI.

“National Payments Corporation of India (NPCI) has been advised by the RBI to look into the request of One97 Communication Ltd (OCL) to become a Third-Party Application Provider (TPAP) for the UPI channel for continued UPI operation of Paytm app, as per norms,” the RBI said in the statement.

The Central Bank further stated that in case NPCI were to grant TPAP status to OCL, “it may be specified that ‘@paytm’ handles will be required to be migrated from Paytm Payments Bank to a set of newly identified banks in a seamless manner to address any prevent problems. disruption, and no new users may be added by the said TPAP until all existing users have been satisfactorily migrated to a new handle.

RBI also advised NPCI to facilitate certification of four to five banks as Payment Service Provider (PSP) banks with proven capabilities to process high volume UPI transactions for seamless migration of ‘@paytm’ handles to other banks.
“This is in line with NPCI norms for minimizing concentration risk,” RBI said.

Update on PayTM QR codes

According to the central bank release, for merchants using PayTM QR codes, One97 Communication Ltd can open settlement accounts with one or more PSP banks (other than Paytm Payments Bank).
“The migration of UPI handles as above is only applicable to customers and merchants who have a UPI handle ‘@Paytm’. For others who have a UPI handle or address other than ‘@Paytm’, no action is required from them,” the RBI further clarified.

“Similarly, the customers, whose underlying account or wallet is currently with Paytm Payments Bank, are advised to make alternative arrangements with other banks well before March 15, 2024, as already advised,” it added.

RBI further informed that holders of FASTag and National Common Mobility Cards (NCMC), issued by Paytm Payments Bank, can make alternative arrangements before March 15, 2024, to avoid any inconvenience.

The National Payments Corporation of India (NPCI), an umbrella organization for operating retail payment and settlement systems in India, is an initiative of the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust payment and settlement infrastructure in India.

(With input from agencies)