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RBI allows Paytm to migrate @paytm UPI users to other banks once NPCI gives approval

This should come as a huge relief to Paytm as it provides customers and merchants with some assurance that UPI services will continue as usual.

The Reserve Bank of India (RBI), on February 23, issued a press release stating that it has advised the National Payments Corporation of India (NPCI), which operates UPI, to examine Paytm's request to become a UPI service provider. The app had earlier relied on the license held by Paytm Payments Bank to provide UPI services. The RBI also advised NPCI to allow Paytm to migrate customers with the @paytm UPI handle from Paytm Payments Bank to other banks. This advice comes after the central bank placed wide-ranging restrictions on Paytm Payments Bank last month, effectively disallowing it from providing any banking or UPI services. Since these restrictions created uncertainty for Paytm customers and merchants, the RBI subsequently issued clarifications in the form of frequently asked questions (FAQs). However, these FAQs did not address the status of @paytm UPI handles, which the central bank has now addressed. To allow Paytm to continue providing Unified Payments Interface (UPI) services, the central bank has stated that the NPCI may facilitate certification of 4-5 banks as Payment Service Provider (PSP) banks with demonstrated capabilities to process high-volume UPI transactions. However, Paytm is instructed not to add any new users until all existing users are satisfactorily migrated from @paytm to a new handle. This development should come as a huge relief to Paytm, as it provides customers and merchants with some assurance that Paytm UPI services will likely continue as usual. The RBI stated that it has made the above decisions to ensure seamless digital…

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