In response to the recent business restrictions imposed on Paytm Payments Bank (PPBL) by the Reserve Bank of India (RBI), the central bank has unveiled a series of measures aimed at ensuring uninterrupted digital payments for customers utilizing the Unified Payments Interface (UPI) with the ‘@paytm’ handle.
The RBI’s latest notification, issued on Friday, February 23, highlights several key initiatives to address the challenges posed by the restrictions on PPBL. These measures are designed to facilitate a smooth transition for UPI users and minimize potential disruptions in the digital payments ecosystem.
The central directives outlined in the RBI’s statement include:
Examination of TPAP Status: The National Payments Corporation of India (NPCI) has been tasked with assessing One97 Communication Ltd’s (OCL) request to become a Third-Party Application Provider (TPAP) for UPI operations. This move aims to ensure the continued operation of the Paytm app within UPI norms.
Seamless Migration of Handles: In the event of NPCI granting TPAP status to OCL, a seamless migration process will be initiated to transfer ‘@paytm’ handles from PPBL to newly identified banks. This transition will be carefully managed to prevent any disruption, with no new users added until existing ones are satisfactorily migrated.
Facilitation of PSP Banks: NPCI will certify 4-5 banks as Payment Service Provider (PSP) Banks with demonstrated capabilities to process high-volume UPI transactions. This step aligns with NPCI norms aimed at minimizing concentration risk within the UPI system.
Furthermore, for merchants utilizing PayTM QR codes, OCL will open settlement accounts with one or more PSP Banks, thereby ensuring uninterrupted business operations.
It is important to note that these measures specifically apply to customers and merchants using the ‘@Paytm’ UPI handle. Users with alternative UPI handles need not take any action.
The RBI emphasizes that customers with underlying accounts or wallets with PPBL should make alternative arrangements with other banks well in advance of the March 15, 2024 deadline. Additionally, holders of FASTag and National Common Mobility Cards issued by PPBL are advised to make alternative arrangements to avoid inconvenience.
