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The National Payments Corp of India (NPCI) is likely to approve a third-party application provider (TPAP) license for Paytm, which is officially known as One 97 Communications, by March 15, states Reuters report.
“The (TPAP license) approval will come before March 15 and most of the checks have been completed,” one of the sources told reuters. Though the license approval will be in place before the deadline ends, the integration with banks may take more than a month, states report.
Paytm may partner with private and public sector banks like Axis Bank, HDFC Bank, State Bank of India and Yes Bank to continue its transactions through UPI.
What Is a Third Party Application Provider License ?
Even Paytm Payments Bank, will stop operating by March 15, after the RBI’s action against it due to non-compliance issues, third-party application provider license will allow its customers to continue using the Paytm app for payments through India’s unified payment interface (UPI).
NPCI operates UPI, which is India’s real-time payments system that allows users to transfer money across banks.
RBI On Paytm Payments Bank
Though NPCI is likely to give a third-party application provider (TPAP) license to Paytm, the chances of extention on the March 15 deadline, set for Paytm Payments Bank to stop its operations by the RBI, are very less.
“No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after March 15, 2024 (extended from the earlier stipulated timeline of February 29, 2024), other than any interest, cashbacks, sweep in from partner banks or refunds which may be credited anytime,” RBI had said in its earlier release against Paytm Payments Bank.
RBI’s On Paytm crisis
RBI Governor Shaktikanta Das, at the post monetary policy press conference, had said that all its actions, including certain restrictions it imposed on Paytm’s associate bank, are in the best interest of the public.
“All our actions being a responsible regulator and supervisor are in the best interest of systemic stability and protection of depositors or customers’ interest. These aspects cannot be compromised. Individual entities should be mindful of such aspects for their long term success,’’ added RBI Governor.
(With Inputs From Reuters)
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