The Reserve Bank of India (RBI) has announced a series of measures regarding Paytm Payments Bank, following previous Press Releases on March 11, 2022, January 31, and February 16, 2024. Additionally, on February 16, 2024, RBI issued FAQs to assist customers, wallet holders, and merchants associated with Paytm Payments Bank.
Effective March 15, 2024, Paytm Payments Bank will no longer accept new credits into customer accounts and wallets. To facilitate seamless digital payments and minimize concentration risk in the Unified Payments Interface (UPI) system, the National Payments Corporation of India (NPCI) has been instructed by RBI to consider One97 Communication Ltd (OCL) as a Third-Party Application Provider (TPAP) for UPI operations, subject to norms. If approved, ‘@paytm’ handles will transition smoothly from Paytm Payments Bank to newly identified banks.
NPCI may certify 4-5 banks as Payment Service Provider (PSP) Banks capable of processing high volume UPI transactions, ensuring minimal risk concentration.
Merchants using Paytm QR Codes will have settlement accounts opened with other PSP Banks, apart from Paytm Payments Bank.
It’s clarified that these measures only affect customers and merchants with ‘@Paytm’ UPI handles. Others are unaffected. Customers with accounts or wallets in Paytm Payments Bank are advised to make alternative arrangements with other banks before March 15, 2024, as advised in RBI’s FAQs.
FASTag and National Common Mobility Card (NCMC) holders from Paytm Payments Bank are urged to make alternative arrangements to prevent inconvenience.
These actions aim to protect customers and the payment system from disruptions, independently of any regulatory actions initiated by RBI against Paytm Payments Bank.
