RBI Asks NPCI To Help Continue Operations Of Paytm App

To ensure a smooth transition for '@paytm' handle users to other banks, RBI has proposed that NPCI certify 4-5 banks as PSP Banks with proven capabilities to handle high-volume UPI transactions

The RBI has restricted Paytm Payments Bank from receiving further credits into its customer accounts and wallets beyond March 15, 2024.

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The Reserve Bank of India (RBI) on Friday said the National Payments Corporation of India (NPCI) has been asked to examine the possibility of it becoming a third party application provider for continued UPI operations of the Paytm app, in a move aimed at ensuring uninterrupted services for Paytm app users. The directive comes as the central bank has restricted Paytm Payments Bank from receiving further credits into its customer accounts and wallets beyond March 15, 2024.

According to RBI's statement, One97 Communication Ltd (OCL), the parent company of the Paytm brand, has made the request for NPCI's involvement in sustaining UPI operations through the Paytm app.

To ensure a smooth transition for '@paytm' handle users to other banks, RBI has proposed that NPCI certify 4-5 banks as Payment Service Provider (PSP) Banks with proven capabilities to handle high-volume UPI transactions.

In a bid to address the concerns of Paytm Payments Bank customers, particularly merchants, RBI has released a comprehensive FAQ document comprising 30 points. RBI Governor Shaktikanta Das had previously indicated that this FAQ would cater to the interests of all stakeholders. Additionally, RBI has extended the deadline for Paytm Payments Bank to cease deposits, credit transactions, and top-ups in customer accounts, wallets, and FASTags until March 15.

The RBI's decision, announced on January 31, to halt further deposits into Paytm Payments Bank accounts from February 29, was clarified by Governor Shaktikanta Das during a press conference following the recent monetary policy committee meeting. Das highlighted that the regulatory action against Paytm Payments Bank primarily revolves around compliance issues rather than regulatory concerns.

Shares of One 97 Communications, parent of Paytm, closed at Rs 407.60 apiece, up 5 per cent on the BSE on Friday.