Paytm has received permission from the National Payments Corporation of India (NPCI) to participate in UPI through the Third-Party Application Provider (TPAP) under the multibank model, as per the fintech company’s filings on the exchange.
In a separate release, NPCI stated that four banks – Axis Bank, HDFC Bank, State Bank of India, and Yes Bank – will act as Payment System Providers (PSP).
“Yes Bank will also serve as the merchant acquiring bank for existing and new UPI merchants for OCL. The “@Paytm” handle shall be redirected to Yes Bank,” the agency said.
This move will enable Paytm users and merchants to continue using UPI services, including autopay mandates, without interruption.
OCL (Paytm-parent One 97 Communications) has been advised to complete migration for all existing handles and mandates, wherever required, to new PSP banks as soon as possible.
The announcement comes weeks after the central bank announced a set of additional steps as a follow-up to its actions against Paytm Payments Bank. The steps also included an advisory to NPCI to consider OCL’s request to become a TPAP for the UPI channel.
Recently, Paytm discontinued inter-company agreements between the company and Paytm Payments Bank Limited (PPBL). The new move aimed to ensure the independent operations of PPBL, the company added.
Earlier, Vijay Shekhar Sharma stepped down from his position as part-time non-executive chairman and board member of PPBL. The company also announced the reconstitution of its board of directors and plans to soon appoint a new chairman.
The developments came in the wake of the Reserve Bank of India (RBI) imposing a set of business restrictions on Paytm Payments Bank over non-compliance and regulatory concerns.
