The Reserve Bank of India (RBI) has issued a directive to the National Payments Corporation of India (NPCI) regarding the request from One97 Communication Ltd (OCL) to become a Third-Party Application Provider (TPAP) for the UPI channel, specifically for the continued operation of the Paytm app.
In a statement released on Friday, the RBI informed that it has advised NPCI to examine the request from One97 Communication Ltd to become a Third-Party Application Provider for the UPI channel, in accordance with the norms.
According to the Central Bank’s directive, if NPCI grants TPAP status to OCL, there may be a requirement for the migration of ‘@paytm’ handles from Paytm Payments Bank to a newly identified set of banks to ensure seamless operations and prevent any disruptions. Additionally, the directive specifies that no new users should be added by the TPAP until all existing users are successfully migrated to a new handle.
RBI has also instructed NPCI to facilitate the certification of 4-5 banks as Payment Service Provider (PSP) Banks with demonstrated capabilities to process high volumes of UPI transactions. This step is aimed at ensuring the smooth migration of ‘@paytm’ handles to these newly identified banks and is in line with NPCI norms to minimize concentration risk, as per the Central bank’s release.
Regarding merchants using PayTM QR codes, One97 Communication Ltd has been advised by RBI to establish settlement accounts with one or more PSP Banks, excluding Paytm Payments Bank, following the RBI’s directives.
The RBI clarified that the migration of UPI handles is applicable only to customers and merchants with a UPI handle ‘@Paytm’. Users with a UPI address or handle other than ‘@Paytm’ do not need to take any action.
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 previously advised by the RBI.
Furthermore, the RBI informed that holders of FASTag and National Common Mobility Cards (NCMC) issued by Paytm Payments Bank should also make alternative arrangements before March 15, 2024, to avoid any inconvenience.
The National Payments Corporation of India (NPCI), established under the provisions of the Payment and Settlement Systems Act, 2007, is an umbrella organization for operating retail payments and settlement systems in India. This initiative, backed by the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA), aims to create a robust Payment and Settlement Infrastructure in India.
