RBI urges NPCI to assess UPI channel use for Paytm amid operational concerns
The RBI's statement highlights that if NPCI grants TPAP status to OCL, the '@paytm' handles should seamlessly migrate from Paytm Payments Bank to newly identified banks to prevent disruptions.
FollowIn a recent development, the Reserve Bank of India (RBI) has directed the National Payments Corporation of India (NPCI) to evaluate One97 Communication Ltd's (OCL) request to function as a Third-Party Application Provider (TPAP) for the Unified Payments Interface (UPI) channel, ensuring the continuity of Paytm app operations.
The RBI's statement highlights that if NPCI grants TPAP status to OCL, the '@paytm' handles should seamlessly migrate from Paytm Payments Bank to newly identified banks to prevent disruptions. During this migration, no new users should be added until existing users are satisfactorily transferred to the new handle.
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For the smooth transition of '@paytm' handles, the RBI suggests that NPCI certify 4-5 banks as Payment Service Provider (PSP) banks with demonstrated capabilities in processing high-volume UPI transactions, adhering to NPCI norms for minimizing concentration risk. The RBI further directs OCL, for merchants using PayTM QR Codes, to open settlement accounts with one or more PSP Banks other than Paytm Payments Bank.
This migration plan specifically applies to customers and merchants with a UPI handle '@Paytm.' For those with a UPI address or handle different from '@Paytm,' no action is required. Customers with underlying accounts/wallets currently with Paytm Payments Bank are advised to make alternative arrangements with other banks.
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