Private lenders HDFC Bank and Yes Bank applied for the third-party application provider (TPAP) with the National Payments Corporation of India (NPCI) on Thursday for running the mobile payments platform Unified Payments Interface (UPI). Earlier in the day, the Reserve Bank of India directed NPCI to look into the request submitted by One97 Communication Ltd (OCL) to function as a third-party application provider for UPI services.
Earlier this week, it was reported that Axis Bank and Paytm had submitted a joint application with NPCI to be a TPAP. A TPAP license will ensure that Paytm users can continue to make digital payments via the Unified Payments Interface (UPI).
As per reports, all the banks have been in discussions with NPCI as the UPI regulator is trying to speed up the transfer process to ensure that customers can seamlessly carry out their transactions after March 15. On February 23, RBI said customers and merchants having ‘@paytm’ handles are to be migrated seamlessly from PPBL to a set of newly identified banks to avoid any disruption.
The central bank had put curbs on Paytm Payments Bank Limited (PPBL), a subsidiary of One97, last month due to persistent non-compliance. These rigorous directives issued by the central bank mandate PPBL to cease all banking activities with an exception solely for withdrawal operations involving residual funds from associated accounts. It is anticipated that this comprehensive enforcement will also impact payment service provider (PSP) functionalities.
RBI has advised customers and merchants of PPBL to shift their accounts to other banks by March 15, giving 15 more days to the embattled company to close most of its operations, including deposit and credit transactions.
One97 Communications shifted its nodal account to Axis Bank from Paytm Payments Bank, a move that will allow continuity of Paytm QR, Soundbox, card machine after the March 15.
One97 Communications holds 49 per cent of the paid-up share capital (directly and through its subsidiary) of PPBL. Paytm Founder and CEO Vijay Shekhar Sharma has a 51 per cent stake in the bank.
Also read: Paytm app: RBI asks NPCI to look into One97 Communication's plea to become TPAP for UPI usage