The Reserve Bank of India (RBI) has introduced further steps to ensure smooth digital payments following restrictions on Paytm Payments Bank. These measures focus on migrating the '@paytm' UPI handle to other banks and advising customers and merchants to make alternative arrangements before March 15, 2024. The aim is to prevent disruption and minimise risks within the UPI system.
Action against Paytm Payments Bank Ltd under Section 35A of the Banking Regulation Act, 1949 - Additional Steps
The Reserve Bank of India, in exercise of its powers under section 35A of the Banking Regulation Act, 1949, had put certain business restrictions on Paytm Payments Bank, videPress Releases dated March 11, 2022,January 31andFebruary16, 2024.RBI also released a set of FAQs on February 16, 2024for the benefit of customers, wallet holders and merchants who are availing banking services
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FAQ :
The RBI is taking additional steps to ensure seamless digital payments and minimise concentration risk in the UPI system, following previous restrictions placed on Paytm Payments Bank.
The National Payments Corporation of India (NPCI) has been asked to examine allowing One97 Communication Ltd (OCL) to operate as a Third-Party Application Provider (TPAP) for UPI. If approved, '@paytm' handles will need to be migrated seamlessly to other identified banks.
Customers and merchants using the '@paytm' UPI handle should prepare for a seamless migration to a new handle with other banks. No action is needed if their UPI address is different from '@paytm'.
Customers whose underlying account or wallet is with Paytm Payments Bank are advised to make alternative arrangements with other banks before March 15, 2024.
Holders of FASTag and NCMC issued by Paytm Payments Bank are advised to make alternative arrangements before March 15, 2024, to avoid any inconvenience.
These actions are taken in the sole interest of protecting customers and the payment system from disruption and are separate from any regulatory or supervisory actions the RBI may have initiated against Paytm Payments Bank.