Worried about Paytm UPI & FASTag migration? RBI to meet NPCI, NHAI officials to rescue Paytm customers

Worried about Paytm UPI & FASTag migration? The Reserve Bank of India is set to convene meetings with several entities including the National Highways Authority of India (NHAI) and the National Payments Corporation of India (NPCI) next week to finalize plans for the transition of merchants and consumers from Paytm, sources familiar with the matter revealed.
The discussions, which will involve stakeholders such as NHAI managing the FASTag service and NPCI overseeing the Unified Payment Interface (UPI) infrastructure, aim to address queries received by the central bank regarding Paytm, following recent regulatory restrictions, an ET report said.
The forthcoming release of frequently asked questions (FAQs) by the RBI will provide guidance on various transition issues for merchants. Paytm Payments Bank Ltd. (PPBL) had been directed by the central bank to cease taking new deposits and offering banking services after February 29.

Paytm Crisis Timeline

Paytm Crisis Timeline

RBI Governor Shaktikanta Das, speaking at the post-monetary policy interaction with reporters on Thursday, confirmed that the regulator would issue clarifications in the upcoming week. Earlier, financial services secretary Vivek Joshi had indicated in an interview with ET on February 7 that the banking regulator might provide further clarification.
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The sudden ban on PPBL’s services has left Paytm’s customers and merchant partners uncertain about the impact on their wallets and payment acceptance devices, prompting them to seek clarity on the matter.
NPCI is collaborating with the central bank to ensure a seamless transition for UPI users, according to a source familiar with the matter. Paytm, in discussions with analysts last week, outlined plans to transfer virtual payment addresses (VPAs) and merchant QR codes linked with PPBL to other banking partners. Additionally, FASTags and wallets issued through PPBL will need to be shifted to other banks.
RBI’s recent directive on January 31 cited persistent non-compliances and supervisory concerns. There is an embargo on Paytm Payments Bank from adding new customers starting March 11, 2022. Lenders may also require approval from central banks before assuming Paytm’s payments settlements business.
Also Read | Paytm Payments Bank ban: ‘Gave enough time to comply’ – RBI’s stern words on persistent non-compliance
RBI Governor Das emphasized the importance of constructive engagement with regulated entities, highlighting the regulator’s approach to ensuring corrective action is taken in a timely manner. He stressed that regulatory actions are proportionate to the severity of the situation, prioritizing systemic stability and customer protection.

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