<p>Following the implementation of business restrictions by the RBI on Paytm Payments Bank last month, which included prohibiting the bank from taking on new credit after March 15, the central bank on Friday, February 23, announced a number of measures against One97 Communication (OCL), the Paytm owner, to ensure that UPI customers can make seamless digital payments using the “@paytm” handle.</p>
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<p>In accordance with the RBI’s announcement on Friday, NPCI has been requested to look into OCL’s request to be added as a third-party application provider (TPAP) for the UPI channel in order to support the Paytm app’s ongoing UPI functionality. Additionally, NPCI is expected to assist in the smooth transfer of the “@paytm” handle to other banks and to facilitate the creation of new settlement accounts for businesses that use Paytm QR codes.</p>
<p>“The RBI stated in the statement that certain additional steps have become necessary to (i) ensure seamless digital payments by UPI customers using the Paytm Payments Bank’s “@paytm” handle and (ii) minimise concentration risk in the UPI system by having multiple payment app providers, as the Paytm Payments Bank cannot accept further credits into its customer accounts and wallets after March 15, 2024.”</p>
<p><strong>The following are the extra steps:</strong></p>
<p>1) The RBI has directed National Payments Corporation of India (NPCI) to review One97 Communication Ltd’s (OCL) application to become a Third-Party Application Provider (TPAP) for UPI channel in order to ensure that the Paytm app continues to operate using UPI in accordance with regulations.</p>
<p>2) It has also been suggested that, in order to minimize any disturbance, “@paytm” handles should be smoothly transferred from Paytm Payments Bank to a group of recently designated banks in the event that NPCI grants TPAP status to OCL. The aforementioned TPAP is not allowed to add any more users until every current user has been successfully transferred to a new handle.</p>
<p>3) The NPCI may assist with the certification of four to five banks as Payment Service Providers (PSPs), or banks having a track record of processing large numbers of UPI transactions, in order to enable the smooth transfer of the “@paytm” handle to other banks. This minimizes concentration danger in accordance with NPCI standards1.</p>
<p>OCL may setup settlement accounts with one or more PSP Banks (other than Paytm Payments Bank) for retailers using PayTM QR Codes.</p>
<p><strong>Moreover, the RBI made clear that:</strong></p>
<p>Only those consumers and retailers that have a UPI handle ending in “@Paytm” are eligible for the aforementioned UPI handle transfer. It is not necessary for anyone using UPI addresses or handles other than “@Paytm” to take any action.</p>
<p>Likewise, clients who already have an underlying account or wallet with Paytm Payments Bank are recommended to establish additional banking arrangements well in advance of March 15, 2024.</p>
<p>The RBI said, “It is reiterated that, in order to avoid any inconvenience, holders of FASTag and National Common Mobility Cards (NCMC) issued by Paytm Payments Bank may make alternative arrangements before March 15, 2024.”</p>
<p>In contrast to the prior decision made on February 29, the RBI this week extended deadlines for a number of business limitations pertaining to Paytm Payments Bank Ltd (PPBL) by 15 days, till March 15, 2024. The deadlines for services like cash transfers and top-ups were extended, and only February 29 was the closure date for the remaining PPBL services.</p>
