SUMMARY
The NPCI has completed most of the TPAP checks for Paytm and the approval is expected before RBI’s curbs on Paytm Payments Bank come into effect
The TPAP licence will allow the fintech giant to continue offering Unified Payments Interface (UPI) services to its app users
Last month, the RBI said it advised the NPCI to examine Paytm’s request to become a TPAP for UPI payments
The National Payments Corporation of India (NPCI) is reportedly expected to grant the third-party application provider (TPAP) licence to One97 Communications, the parent entity of Paytm, by March 15.
The payments body has completed most of the TPAP checks for Paytm, Reuters reported citing a source.
The TPAP licence will allow the fintech giant to continue offering Unified Payments Interface (UPI) services to its app users.
“While the integration with banks may take more than a month, the licence approval should be in place before the deadline ends,” the report cited a source as saying.
It is pertinent to note that the Reserve Bank of India’s (RBI) business restrictions on the fintech major’s banking unit, Paytm Payments Bank Ltd (PBBL), will come into effect on March 15.
The payments bank will be barred from taking any deposits, credit transactions or top-ups in any of its customer accounts post March 15.
The central bank cracked its whip on PPBL in January this year, citing “persistent non-compliances and continued material supervisory concerns”.
As per the RBI’s annual report, it received the highest number of complaints against PBBL between April 1, 2022 and March 31, 2023. The central bank received 501.86 complaints per branch against PPBL, taking the total tally to 3,513.
Last month, the RBI said it advised the NPCI to examine Paytm’s request to become a TPAP for UPI payments.
As per reports, Paytm has applied for the TPAP licence in partnership with Axis Bank and Yes Bank.
Last week, RBI governor Shaktikanta Das also said that the NPCI is expected to soon take a decision on Paytm’s application for the TPAP licence. He also said that the central bank’s curbs on PPBL won’t have any impact on nearly 80%-85% users of Paytm app.
Following the RBI’s action on PPBL, shares of Paytm have crashed over 50%. On Tuesday (March 12), the stock ended 4.99% lower at INR 370.40 on the BSE.
