Concerned About Making Use of Your @Paytm UPI Handle After March 15? RBI Has The Answer You’re Looking For

Many users of the Paytm app are worried after learning about the latest directives from banking regulators regarding UPI payments. The good news for users is that UPI transactions using the unified payments interface will be unaffected by the revised regulations. In a recent advise, the Reserve Bank of India (RBI) directed Paytm

Payments Bank users to consider the idea of switching to another bank for their UPI services by March 15, 2024. This action is being taken in response to regulatory concerns that resulted in operational limitations for the bank. The RBI’s instruction attempts to preserve the effectiveness of the payment ecosystem while guaranteeing a smooth transition for consumers.

The RBI stated in a statement that in order to ensure smooth digital payments by UPI customers using the bank’s “@paytm” handle and to reduce concentration risk in the UPI system by having multiple payment app providers, additional steps have become necessary as PPBL cannot accept further credits into its customer accounts and wallets after March 15, 2024.

RBI’s Advice for Users of Paytm Payment Banks
The RBI directed the National Payments Corporation of India (NPCI) to look into One97 Communication’s (OCL) request to be a third-party application provider (TPAP) for UPI channel so that the Paytm app may continue to operate using UPI in accordance with regulations.
The RBI said that the business may create settlement accounts with one or more banks in order to maintain the functionality of Paytm QR codes. OCL, the company behind the Paytm brand, controls 49% of PPBL.

RBI said that in order to prevent any disturbance, it could be required that “@paytm” handles be smoothly moved from PPBL to a group of recently designated banks in the event that NPCI grants TPAP status to OCL.
It also said that the aforementioned TPAP would not add any new users until every current user has been successfully transferred to a new handle.
The NPCI may assist with the accreditation of four to five banks as Payment Service Providers (PSPs), or banks having a track record of processing substantial volumes of UPI transactions, in order to enable the smooth transfer of the “@paytm” handle to other banks. This minimizes concentration risk in accordance with NPCI guidelines, according to RBI.

The central bank said that OCL may create settlement accounts with one or more PSP Banks (apart from Paytm Payments Bank) for retailers using PayTM QR Codes.
Only these consumers and merchants with a UPI handle of “@Paytm” are eligible for the UPI handle migration.
It is not necessary for anyone using UPI addresses or handles other than “@Paytm” to take any action.

Additionally, RBI requested that users whose Paytm Payments Bank underlying account or wallet be switched to another bank by March 15, 2024, at the latest.
It further said that, in order to minimize any hardship, owners of National Common Mobility Cards (NCMC) and FASTag issued by Paytm Payments Bank may organize other arrangements by March 15, 2024.
The RBI and Indian Banks’ Association (IBA) established the NPCI, an umbrella organization that manages retail payments and settlement systems in India, with the goal of building the country’s payment and settlement infrastructure.

RBI’s measures against the payment bank Paytm
The RBI had placed operating limitations on PPBL on January 31 as a result of serious supervisory concerns and non-compliance problems. RBI agreed on February 16 to provide PPBL till March 15, 2024, an extra 15 days to stop making deposits, credit transactions, or top-ups in any client accounts, wallets, or FASTags.
Customers whose primary account or wallet is now with Paytm Payments Bank are recommended to make additional arrangements with other banks well in advance of March 15, according to the RBI. The statement said that the steps were taken only to safeguard clients and the payment system from potential interruptions, and they do not impact the regulatory or supervisory measures that the RBI has taken against Paytm Payments Bank.

The third-biggest private sector bank in the nation, Axis Bank, and Paytm signed an agreement last week to transfer the nodal accounts. It’s expected that at least one more bank will collaborate on the nodal accounts.
NOTE: Based on information accessible on the NPCI website, Paytm is the third-largest UPI payment app in the nation, handling 1.6 billion transactions each month. The two biggest are Google Pay and PhonePe. Thirty crore wallets and three crore bank clients use Payments Bank PPBL.