NPCI Expected To Give Greenlight To Third-Party License For Paytm This Week: Report

This license will enable customers to continue utilising the Paytm app for payments via India's widely used Unified Payments Interface (UPI) even after the banking arm concludes its operations

On February 16, 2024, the Reserve Bank of India (RBI) extended the deadline for Paytm Payment Bank customers to conduct deposits and credit transactions until March 15 ( Image Source :Getty )

The National Payments Corporation of India (NPCI) is reportedly expected to grant Paytm a third-party application provider license by March 15. Additionally, the Reserve Bank of India is unlikely to extend the March 15 deadline set for Paytm Payments Bank, Paytm's banking unit, to cease operations, according to a Reuters report quoting sources on Tuesday. 

This license will enable customers to continue utilising the Paytm app for payments via India's widely used Unified Payments Interface (UPI) even after the banking arm concludes its operations.

On February 16, 2024, the Reserve Bank of India (RBI) extended the deadline for Paytm Payment Bank customers to conduct deposits and credit transactions until March 15. This decision was prompted by concerns surrounding the bank's ongoing crisis, raising alarms among customers and regulatory authorities.

"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, cashback, sweep-in from partner banks or refunds which may be credited anytime," said RBI in a notification earlier.

The RBI issued a directive to Paytm Payments Bank on January 31, directing it to cease accepting deposits or top-ups in any customer accounts, wallets, FASTags, and other instruments starting from February 29, 2024 onwards. This action was taken due to persistent non-compliance and ongoing material supervisory concerns identified in Paytm Payments Bank Ltd, as indicated by a comprehensive system audit report and subsequent compliance validation report by external auditors.

As a result, the RBI imposed several restrictions on the bank. Additionally, on February 16, 2024, the RBI released a set of FAQs addressing concerns related to the Paytm crisis.

Notably, in February, Paytm’s founder Vijay Shekhar Sharma stepped down from his position as a part-time non-executive chairman and board member at associate entity Paytm Payments Bank Ltd.