Paytm Payments Bank crisis: RBI comes out with another set of measures to mitigate woes of customers

The Reserve Bank of India, on Friday, said National Payments Corporation of India (NPCI) has been advised by the central bank to examine the possibility of it becoming a third-party application provider for continued UPI operations of the Paytm app.

The RBI observed that as the Paytm Payments Bank Limited (PPBL) cannot accept further credits into its customer accounts and wallets after March 15, certain additional steps have become necessary to ensure seamless digital payments by UPI customers using ‘@paytm’ handle operated by PPBL and minimise risk in the UPI system by having multiple payment app providers.

If NCPI becomes the third-party provider, it may be stipulated that ‘@paytm’ handles are to be migrated from PPBL to a set of newly identified banks to avoid any disruption, the RBI said and added that the third-party provider cannot add new users until all the existing users are migrated satisfactorily to a new handle.

NPCI may facilitate certification of four to five banks that have shown capabilities to process high-volume UPI transactions as payment service provider (PSP) banks, the RBI said.

The RBI asked merchants availing the services of PPBL to open settlement accounts with one or more PSP banks.

The migration is applicable to only customers and merchants who have a UPI handle ‘@Paytm’. "For others who have a UPI address or handle other than ‘@Paytm’, no action is required to be taken by them," RBI noted.

The RBI once again asked customers who have underlying account/wallet with PPBL and customers who have FASTag and National Common Mobility Cards (NCMC) issued by PPBL to make alternative arrangements with other banks before March 15.