NPCI allows Paytm to add new UPI customers

The RBI directed Paytm’s Payments Bank to cease customer onboarding in January due to non-compliance issues.

Paytm has been given the green light by the National Payments Corporation of India (NPCI) to welcome new UPI users onboard, provided that they comply with all procedural guidelines and circulars, as per the company’s statement.

The decision is anticipated to provide some respite to Paytm, which had faced challenges after the Reserve Bank of India imposed limitations earlier this year on Paytm’s affiliate, Paytm Payments Bank Limited (PPBL), preventing them from adding new UPI users on the Paytm application.

The NPCI granted Paytm the green light in March to join UPI as a Third-Party Application Provider (TPAP). Approval was given for the company to conduct UPI transactions via four banks: SBI, Axis Bank, HDFC Bank, and YES Bank.

Paytm disclosed to the BSE in a filing late Tuesday evening that it has been granted permission by the NPCI to enroll fresh UPI users.

In a communication dated October 22, 2024, the company stated that the National Payments Corporation of India (NPCI) has authorized the company to enroll new UPI users while complying with all NPCI procedural guidelines and circulars, as mentioned in the Paytm filing. The accompanying NPCI letter granting approval was also provided.

The approval outlined in the letter is contingent upon strict compliance with all NPCI procedural guidelines and circulars, which encompass directives on risk management, app and QR brand guidelines, multi-bank protocols, TPAP market share, and customer data, among others.

Adhering to the stipulations laid out in the tri-partite agreement with NPCI and PSP Banks is also a prerequisite for the company.

NPCI’s correspondence to Vijay Shekhar Sharma, the founder and CEO of One97 Communications, includes a request to comply with various laws and regulations, such as the Payments and Settlement Act of 2007, the Information Technology Act of 2000, the Digital Personal Data Protection Act of 2023, and the circular on Storage of Payment System Data from 2018.

Paytm is a financial technology company that operates under the umbrella of One97 Communications.

The NPCI acknowledged a letter from One97 Communications (OCL) dated August 1, in which the company sought permission to onboard fresh users on its UPI application, Paytm. This request comes after the RBI directives issued on January 31 and February 16 had halted the onboarding of new UPI users on the platform.

The approval for onboarding new users on their UPI application has been granted to One97 Communications Private Limited (OCL) as per the Paytm filing, which outlined the specified conditions after reviewing your request.

The Reserve Bank of India (RBI) took a significant step against Paytm Payments Bank (PPBL) by issuing a directive on January 31 to cease accepting deposits or top-ups in all customer accounts, wallets, FASTags, and other financial instruments. This action was prompted by ongoing non-compliance issues and lingering supervisory concerns.