The Reserve Bank of India on Friday issued a fresh set of guidelines for the smooth migration of the UPI operations linked to embattled Paytm Payments Bank. In a notice issued on Friday evening, the central bank said that the action against Paytm Payments Bank has been taken under Sec 35A of the Banking Regulation Act, 1949.
Releasing additional steps for the next action plan amid the impending deadline, the RBI has asked the NPCI (National Payments Corporation of India) to examine the request of Paytm’s parent company One97 Communication to become the Third Party Application Provider for the UPI operations of Paytm app.
The central bank further said that as and when NPCI gives the third party status to One97 Communication, all “@paytm” handles will migrate to new banks. This will help in seamless transition and no disruption of services for the customers who use UPI on Paytm app.
The bank further said that no new users are to be added. The future onboarding of the users will not take place till all the current users are fully migrated to a new handle/bank.
For smooth migration, RBI suggested the NPCI to certify around five banks as Payment Service Provider Banks. Those who will be selected should have the capacity to handle high volume of UPI operations.
The central bank further added that for all the traders who have been using the Paytm QR code for their daily transactions, One97 Communication may open what it called the ‘settlement accounts.’ These settlement accounts can be with one or more Payment Service Provider Banks apart from Paytm Payments Bank.
Key clarification from RBI for UPI customers using Paytm app
In its Friday notice, the RBI also clarificed that the migration of the UPI handles will be only applicable for those users who have @Paytm as their UPI ID. For all those cutomers who have UPI ID other than @Paytm, the migration is not required.
The customers who have wallet or underlying account with PPB have been told to look for other options available with other banks.