Update on Paytm UPI Replacement: HDFC, Yes Bank Submit Application

TPAP application for UPI services

On Thursday, private lenders HDFC Bank and Yes Bank submitted an application to the National Payments Corporation of India (NPCI) to become third-party application providers (TPAPs) for the Unified Payments Interface (UPI). The Reserve Bank of India (RBI) had earlier today ordered NPCI to investigate One97 Communication Ltd's (OCL) request to serve as a third-party application provider for UPI services.

The news broke earlier this week that Paytm and Axis Bank had applied jointly to NPCI to become a TPAP. Users of Paytm will be able to keep making digital payments through the UPI as long as TPAP is licenced. The UPI regulator, NPCI, reportedly has been in talks with all the banks in an effort to expedite the transfer process so that clients can continue to transact seamlessly after March 15th.

Paytm Payments Bank replacement news

To avoid any disruption, the RBI announced on February 23rd that customers and merchants with ‘@paytm’ handles would be moved seamlessly from PPBL to a set of newly identified banks. Last month, the Central Bank imposed restrictions on One97's Paytm Payments Bank Limited (PPBL) because of the company's chronic noncompliance. With the sole exception of withdrawal operations involving residual funds from associated accounts, PPBL is required by these strict directives from the central bank to cease all banking activities. Payment service provider (PSP) functionalities are also expected to be affected by this comprehensive enforcement.

With 15 more days to shut down most of its operations, including deposit and credit transactions, the troubled company has been given the green light by RBI to advise its customers and merchants to transfer their accounts to other banks by March 15th.