Paytm Gets Third-Party License from NPCI, 4 Banks Provide Support

Paytm, which deals with payment services, has received a Third-Party Application Provider (TPAP) license from the National Payments Corporation of India (NPCI). Paytm’s banking unit Paytm Payments Bank (PPBL) was ordered by the Reserve Bank of India (RBI) to stop services from March 15. The reason for this was the compliance violations committed by PPBL.

PPBL’s wallet, credit transactions and Fastag recharge services will be closed from March 15 onwards. However, its customers will be able to use Unified Payments Interface (UPI). NPCI said in a press release that HDFC Bank, Axis Bank, State Bank of India and YES Bank have agreed to become payment system providers (PSPs) of One97 Communications, which runs Paytm. With this, users will be able to link their bank accounts with Paytm and do UPI related transactions.

Last month, 1.41 billion transactions worth approximately Rs 1.65 lakh crore were done on Paytm. The company plans to lay off about 20 percent workers from PPBL. This layoff will be done in some divisions including operations. Reuters report quoted sources with knowledge of the matter as saying, “Due to this RBI order, workers with low ratings for appraisal have been asked to resign. There is disappointment among the workers because the management is “Has gone back on his promise not to do any layoffs.” There were about 2,775 workers in Paytm Payments Bank in December last year.

One 97 Communications holds about 49 percent stake in Paytm Payments Bank. There was a huge fall in Paytm’s shares after the RBI order to close this unit. Earlier this month, the Financial Intelligence Unit (FIU) had imposed a penalty of more than Rs 5 crore on Paytm Payments Bank. The reason for this was the violations in reporting illegal amounts sent through Paytm Payments Bank accounts. The FIU under the Finance Ministry had investigated PPBL after receiving information from law enforcement agencies that some entities were involved in illegal activities including online gambling and sending the proceeds through banks.