Paytm to become third-party app, to continue UPI operation via 4 banks
All Paytm Payments Bank Limited (PPBL) customers have been advised by the RBI to shift to other banks by March 15. The PPBL had about 30 crore wallets and 3 crore bank customers.
The National Payments Corporation of India (NPCI) on Thursday (March 14) allowed Paytm to continue UPI transactions through four banks – SBI, Axis Bank, HDFC Bank, and YES Bank.
The decision comes a day before Reserve Bank's March 15 deadline barring Paytm Payments Bank Ltd (PPBL) from accepting deposits, credit transactions, or top-ups in any customer accounts. One97 Communications Limited (OCL), owner of the Paytm brand, holds a 49 per cent stake in PPBL.
All PPBL customers have been advised by the RBI to shift to other banks by March 15. The PPBL had about 30 crore wallets and 3 crore bank customers.
"NPCI has today granted approval to One97 Communications Limited (OCL) to participate in UPI as a Third-Party Application Provider (TPAP) under multi-bank model," the payment infrastructure provider said in a statement.
The four banks will act as PSP (Payment System Provider) banks to OCL.
"YES Bank shall also be acting as merchant acquiring bank for existing and new UPI merchants for OCL," NPCI said.
Further, it said '@Paytm' handle would be redirected to YES Bank, "enabling existing users and merchants to continue to do UPI transactions and autoPay mandates" in a seamless and uninterrupted manner.
The OCL has been advised to complete the migration for all existing handles and mandates, wherever required, to new PSP banks at the earliest, NPCI said.
Last week, RBI Governor Shaktikanta Das said as many as 80-85 per cent Paytm wallet users will not face any disruption because of regulatory actions, and the remaining users have been advised to link their apps to other banks.
In a major action against Paytm Payments Bank (PPBL), RBI, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTags and other instruments after February 29. Subsequently, the deadline was extended to March 15.
The direction follows persistent non-compliance and continued material supervisory concerns, the central bank said in a statement.
On March 11, 2022, the RBI barred PPBL from onboarding new customers with immediate effect.
Following regulatory actions, promoter Vijay Shekhar Sharma last month stepped down as part-time non-executive Chairman of Paytm Payments Bank Limited and the board of the bank has been reconstituted.
Former Central Bank of India chairman Srinivasan Sridhar, former Bank of Baroda Executive Director Ashok Kumar Garg, and two retired Indian Administrative Service (IAS) officers were inducted on the board of the bank.
NHAI has advised Paytm FASTag users to obtain a new FASTag from another bank before March 15 to ensure a smooth travel experience and avoid inconvenience at toll plazas.