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The Reserve Bank of India (RBI) on Friday asked National Payments Corporation of India (NPCI) to examine use of UPI channel to allow Paytm App to continue operations and facilitate migration of @paytm handles to 4-5 banks.
RBI asked NPCI to examine the possibility of it becoming a third party application provider for continued UPI operations of the Paytm app.
The central bank has barred Paytm Payments Bank from accepting further credits into its customer accounts and wallets after March 15, 2024.
With an aim to ensure seamless digital payments by UPI customers using ‘@paytm’ handle operated by the Paytm Payments Bank, RBI said it has asked the National Payments Corporation of India (NPCI) to examine the request to become a Third-Party Application Provider (TPAP) for UPI channel for continued UPI operation of the Paytm app.
The request has been made by One97 Communication Ltd (OCL), which owns the Paytm brand, RBI said in a statement.
For seamless migration of ‘@paytm’ handle to other banks, the Reserve Bank of India (RBI) said NPCI may facilitate certification of 4-5 banks as Payment Service Provider (PSP) Banks with demonstrated capabilities to process high volume UPI transactions.
RBI’s action against Paytm was taken after a Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.
The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, according to the order.
Settlement of all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) shall be completed by March 15, 2024 and no further transactions shall be permitted thereafter, the order further states.
With inputs from agencies
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