Paytm Crisis: RBI final week prolonged deadlines on sure enterprise restrictions until March 15. (Representative picture)
Paytm Payments Bank Crisis: Among different measures, NPCI has been requested to look at Paytm’s request to turn into a 3rd-occasion software supplier for UPI channel for continued UPI operation of the Paytm app
After the RBI final month put sure enterprise restrictions on Paytm Payments Bank, together with limiting it from accepting additional credit after March 15, the central financial institution on Friday, February 23, introduced a number of measures in opposition to One97 Communication (OCL), the proprietor of Paytm, for seamless digital funds by UPI clients utilizing ‘@paytm’ deal with.
According to the RBI’s notification on Friday, NPCI has been requested to look at the request of OCL to turn into a 3rd-occasion software supplier (TPAP) for UPI channel for continued UPI operation of the Paytm app; to facilitate seamless migration of ‘@paytm’ deal with to different banks; and facilitate new settlement accounts for retailers who’re utilizing Paytm QR codes.
“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 to (i) ensure seamless digital payments by UPI customers using ‘@paytm’ handle operated by the Paytm Payments Bank, and (ii) minimise concentration risk in the UPI system by having multiple payment app providers,” the RBI stated within the assertion.
The further steps are as follows:
1) National Payments Corporation of India (NPCI) has been suggested by the RBI to look at the request of One97 Communication Ltd (OCL) to turn into a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app, as per the norms.
2) It has been additional suggested that within the occasion of NPCI granting TPAP standing to OCL, it could be stipulated that ‘@paytm’ handles are to be migrated in a seamless method from Paytm Payments Bank to a set of newly recognized banks to keep away from any disruption. No new customers are to be added by the stated TPAP till all the prevailing customers are migrated satisfactorily to a brand new deal with.
3) For seamless migration of ‘@paytm’ deal with to different banks, NPCI might facilitate certification of 4-5 banks as Payment Service Provider (PSP) Banks with demonstrated capabilities to course of excessive quantity UPI transactions. This is consistent with NPCI norms for minimising focus risk1.
For the retailers utilizing PayTM QR Codes, OCL might open the settlement accounts with a number of PSP Banks (aside from Paytm Payments Bank).
The RBI additionally clarified that:
The migration of UPI handles as above is relevant solely to such clients and retailers who’ve a UPI deal with ‘@Paytm’. For others who’ve a UPI tackle or deal with aside from ‘@Paytm’, no motion is required to be taken by them.
Similarly, the purchasers, whose underlying account/ pockets is at the moment with Paytm Payments Bank, are suggested to make different association with different banks effectively earlier than March 15, 2024.
“It is reiterated that the holders of FASTag and National Common Mobility Cards (NCMC) issued by Paytm Payments Bank, may make alternative arrangements before March 15, 2024 to avoid any inconvenience,” the RBI acknowledged.
Last week, the RBI prolonged deadlines on sure enterprise restrictions concerning Paytm Payments Bank Ltd (PPBL) by 15 days until March 15, 2024, as in opposition to the February 29 determined earlier. The deadlines have been prolonged on providers like high-ups and fund transfers, whereas the remaining PPBL providers can be shut on February 29 solely.
