The Reserve Bank of India (RBI) on Friday said it has taken certain additional “necessary” steps to enable seamless digital payments from Unified Payments Interface (UPI) customers using the handle '@paytm' operated by Paytm Payments Bank. ensure.
The banking regulator says these measures will minimize concentration risk in the UPI system as there are multiple payment app providers.
This comes after Paytm Payments Bank was banned from accepting further credits to its customer accounts and wallets after March 15, 2024. Paytm Payments Bank is 51% owned by Paytm CEO Vijay Shekhar Sharma while the remaining 49% is owned by One 97 Communications.
The National Payments Corporation of India (NPCI) has been directed by the RBI to accept Paytm parent company One97 Communication Ltd's application. to consider becoming a Third Party Application Provider (TPAP) for the UPI channel to continue the UPI operations of the Paytm app according to the norms.
“It was also noted that in the event NPCI grants TPAP status to OCL, it may be stipulated that “@paytm” handles will be seamlessly migrated from Paytm Payments Bank to a number of newly identified banks in order to achieve this to avoid “disruption,” the central bank says, adding that the TPAP is not intended to add new users until all existing users have been satisfactorily migrated to a new handle.
“For seamless migration of '@paytm' handle to other banks, NPCI can facilitate certification of 4 to 5 banks as Payment Service Provider (PSP) banks with proven capability to process high volume UPI transactions,” it said RBI. This is in line with NPCI norms to minimize concentration risk, it said.
For merchants using PayTM QR Codes, Paytm parent company One 97 Communications may open the billing accounts with one or more payment service providers banks (other than Paytm Payments Bank).
“It is also clarified that the migration of UPI handles described above is applicable only to those customers and merchants who have a UPI handle @Paytm. For others who have a UPI address or username other than @Paytm, they need not take any action,” the banking regulator said.
Likewise, the customers whose underlying account/wallet is currently with Paytm Payments Bank are advised to make alternative arrangements with other banks well before March 15, 2024 as per the ones published by RBI on February 16, 2024 FAQs recommended.
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 said.
“All the above measures are taken solely in the interest of protecting customers and the payment system from possible disruptions and do not affect any regulatory or supervisory action taken by the RBI against Paytm Payments Bank,” it added.
