Finance & Stock Market
RBI implies that a sponsor bank will be allowed to step in
By - 16 Feb 2024 09:01 PM
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The Reserve Bank of India (RBI) has implied that a sponsor bank will be allowed to step in to manage Paytm's transactions, in the FAQs released on February 16. A payment processor app--as a third-party application provider (TPAP)--needs a sponsor bank to access the UPI infrastructure. Until now, Paytm had Paytm Payments Bank (PPB). With the central bank cracking down on the bank, there was heightened uncertainty around Paytm's future. This latest communication from RBI should settle that to a large extent. The sponsor bank can step in provided the National Payments Corporation of India (NPCI) gives its approval. Market sources told Moneycontrol that the bank names are likely to be announced next week. The stock was up 5 percent today.The RBI released FAQs suggests developments along this line in point number 21. This answered a question that a merchant could have. Yes. If your receipt and transfer of funds is linked to any bank account other than Paytm Payments Bank, you can continue to use this arrangement even after March 15, 2024. This implies that a sponsor bank can step in to manage Paytm's nodal account that accepts payments made to its merchant partners |
