RBI asks payments authority to examine Paytm's TRAP plea
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New Delhi: Following the application by Paytm, the digital payment app, to become a third party application provider (TRAP), the Reserve Bank of India asked the Payments Corporation of India to examine the request, the central bank said on Friday.
If the request by Paytm is approved, the app could continue processing payments via UPI- unified payments interface, Reuters reported.
RBI had asked Paytm Payments Bank, an associate of Paytm, to stop its business by March 15. The Jan 31 direction by the central bank led to disruptions for Paytm, which used the banking unit at the back end.
As per RBI mandate, Paytm will need to be backed by a set of newly identified banks. RBI has asked the payment corporation to handle the migration. It also said that no new users should be added by Paytm until all the existing users are "migrated satisfactorily to a new handle", Reuters quoted RBI.
The Reserve Bank of India (RBI) granted Paytm Payments Bank an extension until March 15 to halt fresh deposits or top-ups in any customer accounts, wallets, or prepaid instruments, extending the previous deadline of February 29. This decision is made in consideration of the interests of customers, including merchants associated with Paytm Payments Bank, who may require additional time to make alternative arrangements. RBI has instructed the bank to ensure that customers can withdraw or utilise the balance amount in their accounts even after March 15. In clarifications issued on February 16, RBI stated that customers will still be able to receive refunds and cashback in their Paytm Payments Bank accounts. However, after March 15, they will no longer be able to receive salaries, subsidies, or Aadhaar-linked direct benefit transfers.
