RBI Pushes Paytm To Obtain Third Party Provider License For Seamless Transition

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The Reserve Bank of India (RBI) announced additional measures on Friday to ensure Paytm customers can continue making digital payments without disruption after the March 15th deadline to stop credits into Paytm Payments Bank accounts.

RBI Instructs Review

RBI has directed the National Payments Corporation of India (NPCI) to review digital payments company One97 Communications’ (OCL) request to become a Third Party Application Provider (TPAP) for its Paytm app.

If NPCI grants Paytm TPAP status, RBI advised that the “@paytm” handles would need to migrate seamlessly from Paytm Payments Bank to newly onboarded partner banks. This would avoid inconveniencing customers. Paytm cannot add new users under its TPAP license until existing customers have moved to the new bank handles.

Partner Banks

To mitigate risk, RBI also instructed NPCI to authorize 4-5 “payment service provider” banks capable of handling high volumes of UPI transactions to partner with Paytm.

Merchants using Paytm QR codes may also see their settlement accounts shifted to these bank partners instead of Paytm Payments Bank.


RBI reiterated that customers with wallets or accounts at Paytm Payments Bank need to make alternate arrangements before March 15th. This deadline also applies to FASTag and National Common Mobility Card holders.

Obtaining a TPAP license is crucial for Paytm to keep operating amidst regulatory scrutiny. RBI previously denied Paytm’s application for a payment aggregator license. Last week, it directed settlement of Paytm’s Soundbox, QR and card machine transactions to shift from Paytm Payments Bank to Axis Bank.


The latest RBI directives underscore the regulator’s determination to enforce compliance standards and minimize concentration risk in India’s rapidly evolving digital payments landscape.

For market leader Paytm, the urgency is clear – migrate customers or merchant partners to new bank partners in an orderly fashion prior to the March 15th inflection point, while simultaneously securing a TPAP license. This would allow core payments services to continue operating. RBI’s specific instructions around high volume processing capability also signals that more licensed banks joining UPI is likely.

While some short-term uncertainty remains for Paytm until all migration and licensing activities conclude, RBI’s measures aim to prevent market disruption as much as possible. Stability, security and choice will define the next phase of Indian digital payments growth.

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Mobeen Meet Mobin, an automotive and business writer at Times Bull. With a passion for the latest trends and innovations in these industries, Mobin brings engaging perspectives to readers through his articles. To discuss his writing or potential opportunities at Times Bull, reach out at timesbull@gmail.com. Read More
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