One97 Communications Limited, the parent company of Paytm, has received approval from the National Payments Corporation of India (NPCI) to start adding new users to its Unified Payments Interface (UPI) service again.
Earlier this year, the Reserve Bank of India (RBI) had temporarily stopped Paytm from onboarding new users for its UPI services. However, in a letter dated October 22, 2024, One97 Communications informed the stock exchanges that the NPCI has now lifted that suspension.
Why was the suspension lifted?
The approval came after Vijay Shekhar Sharma, the Founder and CEO of One97 Communications, made a request to the NPCI on August 1, 2024, asking for the restrictions to be removed. The RBI had imposed these restrictions in January and February 2024, pausing new user sign-ups on Paytm’s UPI service.
Now, with the NPCI’s permission, Paytm can resume adding new UPI users. However, this comes with conditions that Paytm must strictly follow.
Paytm to follow NPCI rules
One97 Communications must comply with all of NPCI’s rules, including risk management, branding guidelines, multi-bank integration, and rules on market share for third-party apps like Paytm. The company also needs to ensure proper handling of customer data.
Paytm must also abide by several legal requirements, such as the Payments and Settlement Act of 2007, the Information Technology Act of 2000, the Digital Personal Data Protection Act of 2023, and an NPCI guideline from 2018 on payment data storage.
This approval is crucial as Paytm works to strengthen its presence in the competitive UPI market.
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