The RBI has instructed the NPCI to review the application submitted by One97 Communication Ltd.
Mumbai: In its latest directive, the Reserve Bank of India has given instructions to the National Payments Corporation of India to closely assess the application submitted by One97 Communication Ltd. Behind issuing this directive, the aim of the central bank is to allow this corporation to become a Third-Party Application Provider for the UPI channel. This is all in a bid to maintain steady and smooth operations of the Paytm app, as per a report by news agency ANI.
“National Payments Corporation of India (NPCI) has been advised by the RBI to examine the request of One97 Communication Ltd (OCL) to become a Third-Party Application Provider (TPAP) for the UPI channel for continued UPI operation of the Paytm app, as per the norms,” the RBI said in the statement.
The Central Bank further stated that in the event of NPCI granting TPAP status to OCL, “it may be stipulated that ‘@paytm’ handles are to be migrated in a seamless manner from Paytm Payments Bank to a set of newly identified banks to avoid any disruption, and no new users are to be added by the said TPAP until all the existing users are satisfactorily migrated to a new handle.”
RBI also advised NPCI to facilitate certification of 4-5 banks as Payment Service Provider (PSP) Banks with demonstrated capabilities to process high volume UPI transactions for seamless migration of ‘@paytm’ handles to other banks.
“This is in line with NPCI norms for minimising concentration risk,” RBI said.
Update On PayTM QR Codes
As per the central bank’s release, for merchants using PayTM QR codes, One97 Communication Ltd may open settlement accounts with one or more PSP banks (other than Paytm Payments Bank).
“The migration of UPI handles as above is applicable only to such customers and merchants who have a UPI handle ‘@Paytm’. For others who have a UPI address or handle other than ‘@Paytm’, no action is required to be taken by them,” the RBI further clarified.
“Similarly, the customers, whose underlying account or wallet is currently with Paytm Payments Bank, are advised to make alternative arrangements with other banks well before March 15, 2024, as already advised,” it added.
RBI further informed 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 National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems in India, is an initiative of the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment and Settlement Infrastructure in India.
(With inputs from agencies)