"RBI Introduces New Measures to Ensure Smooth UPI Payments Amid Paytm Payments Bank Crisis"

 

Following last month's imposition of business restrictions by the RBI on Paytm Payments Bank, which included halting further credit acceptance after March 15, the central bank has now announced a series of measures against One97 Communication (OCL), the parent company of Paytm. These measures aim to facilitate uninterrupted digital payments via UPI for customers utilizing the '@paytm' handle.

 

In a notification issued on Friday, February 23, the RBI instructed NPCI to assess OCL's request to operate as a third-party application provider (TPAP) for the UPI channel, enabling the continuation of UPI services on the Paytm app. Additionally, NPCI has been tasked with streamlining the migration process of '@paytm' handles to other banks and establishing new settlement accounts for merchants utilizing Paytm QR codes.

 

The RBI underscored the necessity of these measures due to Paytm Payments Bank's inability to accept further credits into customer accounts and wallets after March 15, 2024. This move aims to ensure seamless digital payments for UPI customers using the '@paytm' handle and mitigate concentration risks within the UPI ecosystem by fostering the involvement of multiple payment app providers.