RBI In Talks With Toll, Mobile And Bill Payment Organizations Amid Paytm Overhaul; Report

The Reserve Bank of India (RBI) is engaging in discussions with various organizations handling toll payments, mobile payments, and bill payments. This comes ahead of the release of frequently asked questions (FAQs) regarding the Paytm overhaul expected on February 14 or 15.

Moneycontrol Sources familiar with the matter revealed that discussions involve National Electronic Toll Collection (NETC), responsible for toll payments through FASTag; National Payments Corporation of India (NPCI), which oversees the Unified Payments Interface (UPI); and Bharat Bill Payment System (BBPS), managing bill payments. One 97 Communications, the owner of the Paytm brand, utilized Paytm Payments Bank Limited (PPBL) as the sponsor bank, maintaining nodal accounts for these services.

A senior banking executive involved in the talks stated, "The discussions with these organizations are to understand how to help customers seamlessly move to other banks or transfer balance amounts. There has also been discussion on how not to disrupt UPI payments."

However, the executive clarified that there won't be an extension of the deadline for banking services provided by PPBL. Despite expectations for RBI to offer indemnity for any KYC-related issues, the executive highlighted that FAQs wouldn't address banks making business decisions to collaborate with PPBL. "There is no indemnity coming up for banks. Whoever takes over the accounts will have to figure out the KYC issues," the Moneycontrol source added.

Meanwhile, Paytm has been actively in talks with Yes Bank, Axis Bank, Canara Bank, ICICI Bank, HDFC Bank, and SBI to become the payment service provider (PSP) bank for creating new UPI handles for Paytm customers. Previously, PPBL held the exclusive role of being the sole PSP bank for Paytm.

"The banks are awaiting RBI FAQs before finalizing the partnership with Paytm. There need to be more details on migration and transfer of assets," said another Moneycontrol source familiar with the matter. The RBI's clarification will play a crucial role in determining the complexity of migrating over 90 million customers who use Paytm for UPI.

Another source expressed concerns about the fate of existing UPI customer data with Paytm, as PPBL acts as the PSP bank and custodian of this information. Without granting the new bank access to PPBL data, customers risk losing transaction history and other vital information on Paytm. The Moneycontrol source suggested that the RBI might provide a transition period for the new PSP bank without extending the overall deadline. Preserving past data is crucial to prevent disruptions for Paytm users transitioning to a new PSP bank.

As the situation unfolds, customers and stakeholders await the RBI FAQs for comprehensive insights into the impending changes and the measures in place to ensure a seamless transition for Paytm users.

*Inputs from Moneycontrol*