On 23-2-2024, the Reserve Bank of India (‘RBI’) laid down additional steps that has to be followed by the Paytm Payments Bank Ltd. (‘Paytm Bank’) along the with the business restrictions that were imposed on the Paytm Bank earlier.
Key Points:
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Need-
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To ensure seamless digital payments by UPI customers using “@paytm” handle.
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To minimize the risk in the UPI system by having multiple payment application providers.
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Additional Steps:
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RBI has advised the National Payments Corporation of India (‘NPCI’) to examine the request of One97 Communication Ltd. (‘OCL’) to become a Third-Party Application Provider (‘TRAP’) for UPI channel for continued UPI operation of the Paytm app.
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Further, it has been advised that in case NPCI grants TRAP status to OCL, the migration of “@paytm” handles should be migrated in a seamless manner from Paytm bank to other any other newly identified bank.
No new users will be added by the TRAP until all existing users have been migrated to a new handle.
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NPCI can facilitate certification of 4-5 banks as Payment Service Provider (‘PSP’) Banks having capabilities to process high volume UPI transactions to make the migration seamless. This will also minimize concentration risk.
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OCL can open settlement accounts with one or more PSP Banks for the merchants using PayTM QR Codes.
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Clarification:
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No action is required for customers having UPI address other than “@paytm”.
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Customers having underlying account/ wallet with Paytm Bank, holders of Fastag and National Common Mobility Cards have been advised to make alternative arrangements with other banks before 15-3-2024.
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