 "Paytm parent One97 Communications plans partnership with 4 banks for UPI")
One97 Communications may collaborate with major banks like State Bank of India (SBI), HDFC Bank, Axis Bank, and YES Bank to settle Unified Payments Interface (UPI) transactions upon acquiring the third-party app provider (TPAP) license, according to a report by the Times of India.
The transition is expected to be seamless and gradual, with the "@paytm" handle being retained. However, instead of linking to Paytm Payments Bank (PPBL), these handles will redirect to one of the four banks for settlement.
PPBL's system will continue to operate after March 15, allowing customers to access their accounts for withdrawals. The bank will also continue to offer UPI services to facilitate withdrawals in compliance with the Reserve Bank of India (RBI)'s directives.
As earlier reported by Business Standard, the National Payments Corporation of India (NPCI) is likely to approve Paytm's TPAP license by March 15. This will allow users to continue using the Paytm app for UPI payments, even if its banking arm, PPBL, ceases operations following regulatory action due to issues of non-compliance.
On the merchant side, those with current accounts at PPBL are being transitioned to other banks individually. The company has already established a nodal account with Axis Bank and will do the same with other banks soon.
On March 12, the BSE issued an advisory to investors who have exclusively linked their PPBL accounts for trading purposes, alerting them to recent RBI regulatory actions.
"Investors are advised to review their current banking arrangements and add additional bank accounts with other banks to avoid any transactional impact due to the aforementioned RBI directive," it emphasised.