Discussions with PSP banks are already underway. However, the process would take almost a month.
One97 Communication Limited (OCL), Paytm's parent, must secure partnerships with other payment service providers (PSP) banks. Only after this, its application for third party application provider (TPAP) status will be reviewed, as per a Business Standard report.
A payment service provider is a third-party provider that helps merchants accept payments, and a third-party application provider helps UPI-compliant apps make payments.
Paytm has to connect with banks other than Paytm Payments Bank. Discussions with PSP banks are already underway. However, the process would take almost a month, says the Business Standard report. Thus, the platform might not be able to immediately offer UPI services after March 15.
From March 15, the RBI has prevented PPBL from accepting any new deposit or credit any transactions.
The central bank imposed business restrictions on Paytm for "persistent non-compliance and continued material supervisory concerns." Following this, Vijay Shekhar Sharma, the founder of Paytm, also stepped down from his post as the part-time non-executive chairman and board member.
The National Payment Corporation of India (NPCI) that approves participation in UPI for banks, has been asked by the central bank to review Paytm’s third part app provider request for UPI.
Meanwhile, in an interview with the Press Trust of India (PTI), Union Minister Rajeev Chandrasekhar said that the Reserve Bank's regulatory action on Paytm Payments Bank has drawn the attention of fintech firms to comply with laws.
It is said that the central bank acted against Paytm because of the platform’s non-compliance with Know Your Customer (KYC) norms, which exposed customers to serious risks.