Worried About Using @Paytm UPI Handle After March 15? RBI Has A Solution You Want To Know
Worried About Using @Paytm UPI Handle After March 15? RBI Has A Solution You Want To Know
The RBI has given the NPCI certain directives about Paytm Payment Bank Limited (PPBL) customers and asked them to consider shifting the UPI handle '@paytm' of Paytm's customers to four to five other banks.
Understanding the recent orders from banking authorities regarding UPI payments on the Paytm app has left many customers feeling concerned. However, there is good news for users as the latest directives will not impact unified payments interface, UPI transactions. The Reserve Bank of India (RBI) issued a new advisory on Friday, instructing Paytm Payments Bank customers to examine the possibility of migrating UPI services to other banks by March 15, 2024. This move comes in light of regulatory concerns that led to restrictions on the bank’s operations. The RBI’s directive aims to ensure a seamless transition for customers and maintain the efficiency of the payment ecosystem.
‘’As PPBL cannot accept further credits into its customer accounts and wallets after March 15, 2024, certain additional steps have become necessary to ensure seamless digital payments by UPI customers using ‘@paytm’ handle operated by the bank, and minimise concentration risk in the UPI system by having multiple payment app providers, said the RBI said in a statement.
National Payments Corporation of India (NPCI) has been advised by the RBI to examine the request of One97 Communication (OCL) to become a third-party application provider (TPAP) for UPI channel for continued UPI operation of the Paytm app, as per the norms,” said the central bank.
To keep Paytm QR codes running, the company may open settlement accounts with one or more banks, according to RBI. OCL, which owns the Paytm brand, holds a 49 per cent stake in PPBL.
RBI further said 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 PPBL to a set of newly identified banks to avoid any disruption.
No new users are to be added by the said TPAP until all the existing users are migrated satisfactorily to a new handle, it added.
For seamless migration of ‘@paytm’ handle to other banks, NPCI may facilitate certification of 4-5 banks as Payment Service Provider (PSP) Banks with demonstrated capabilities to process high volume UPI transactions. This is in line with NPCI norms for minimising concentration risk,” said RBI.
Also, for the merchants using PayTM QR Codes, OCL may open the settlement accounts with one or more PSP Banks (other than Paytm Payments Bank), said the central bank.
The migration of UPI handles 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.
RBI also asked the customers, whose underlying account/ wallet is currently with Paytm Payments Bank, to make an alternative arrangement with other banks well before March 15, 2024.
It further said 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.
NPCI, an umbrella organisation for operating retail payments and settlement systems in India, is an initiative of RBI and Indian Banks’ Association (IBA) for creating a payment and settlement infrastructure in India.
RBI’s action against Paytm payment bank
On January 31, the RBI had imposed operational restrictions on PPBL due to non-compliance issues and significant supervisory concerns. On February 16, RBI decided to grant an additional 15 days until March 15, 2024, for PPBL to halt deposits, credit transactions, or top-ups in any customer accounts, wallets, and FASTags.
The RBI said that the customers, whose underlying account/wallet is currently with Paytm Payments Bank, are advised to make alternative arrangements with other banks well before March 15. It said actions were undertaken in the sole interest of protecting the customers and payment system from any possible disruptions and are without any prejudice to the regulatory or supervisory actions initiated by the RBI against Paytm Payments Bank.
Last week, Paytm inked a pact with Axis Bank — the third largest private sector bank in the country — to transfer the nodal accounts. At least one more bank is likely to partner for the nodal accounts.
NOTE: Paytm is the third largest app for UPI payments in the country, processing 1.6 billion monthly transactions, according to data available on the NPCI website. PhonePe and Google Pay are the two largest. Payments Bank PPBL has 30 crore wallets and 3 crore bank customers.
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