A week after extending the deadline for operations, the Reserve Bank of India (RBI) on Friday has come up with additional ‘necessary’ steps for the Paytm Payments Bank.
RBI said it has advised National Payments Corporation of India (NPCI) to examine the request of One97 Communication Ltd (OCL) to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm App.
As the Paytm Payments Bank cannot accept further credits into its customer accounts and wallets after March 15, 2024, certain additional steps have become necessary, RBI said.
Elaborating on those steps, the central bank said it is required to ensure seamless digital payments by UPI customers using ‘@paytm’ handle operated by the Paytm Payments Bank, and minimise concentration risk in the UPI system by having multiple payment app providers.
What are the additional steps?
National Payments Corporation of India (NPCI) has been advised by the RBI to examine the request of One97 Communication Ltd (OCL) to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app, as per the norms.
It has been further advised that in the event of NPCI granting TPAP status to OCL, it may be stipulated that ‘@paytm’ handles are to be migrated in a seamless manner from Paytm Payments Bank to a set of newly identified banks to avoid any disruption.
Further, the RBI said in a statement that no new users are to be added by the said TPAP until all the existing users are migrated satisfactorily to a new handle.
For seamless migration of ‘@paytm’ handle to other banks, NPCI may facilitate certification of 4-5 banks as Payment Service Provider (PSP) Banks with demonstrated capabilities to process high volume UPI transactions. This is in line with NPCI norms for minimising concentration risk.
For the merchants using PayTM QR Codes, OCL may open the settlement accounts with one or more PSP Banks (other than Paytm Payments Bank)
RBI has clearly mentioned that the migration of UPI handles is applicable only to such customers and merchants who have a UPI handle ‘@Paytm’.
For others who have a UPI address or handle other than ‘@Paytm’, no action is required to be taken by them.
Similarly, the customers, whose underlying account/ wallet is currently with Paytm Payments Bank, are advised to make alternative arrangement with other banks well before March 15, 2024.
Reiterates FASTag and National Common Mobility Cards concerns
Again making the FASTag and National Common Mobility Cards (NCMC) holders cautious, the RBI reiterated that the holders of these cards issued by Paytm Payments Bank, may make alternative arrangements before March 15, 2024 to avoid any inconvenience.
In its detailed Frequently Asked Questions (FAQs) released last week, RBI had clarified that for the FASTag issued by Paytm Payments Bank, users can continue to use your FASTag to pay toll upto the available balance. However, no further funding or top ups will be allowed in the FASTags issued by Paytm Payments Bank after March 15, 2024.
Further, after the said deadline, users will not be able to top-up or recharge FASTag issued by Paytm Payments Bank.
