" "

SBI partners with Sharma's Paytm for its UPI business: Report

ISN Team
New Update
SBI partners with Sharma's Paytm

The Reserve Bank of India (RBI) has placed business restrictions on Paytm Payments Bank Limited (PPBL), setting a deadline that bars the bank from operating beyond March 15.

The strigent action has led Paytm's parent company, One97 Communications, to seek new partnerships for its Unified Payments Interface (UPI) business. The State Bank of India (SBI) is now reported to be among four major banks, including Yes Bank, Axis Bank, and HDFC Bank, that will support Paytm's consumer-facing UPI payments, a Moneycontrol report said.

Transitioning to new banking partners 

In response to the RBI's restrictions, Paytm has been proactive in transitioning its operations to ensure continuity for its merchants and customers. The company shifted its nodal accounts to Axis Bank to settle UPI payments, a critical step to keep its digital payment ecosystem functional post-March 15.


The company has been doing this to comply with regulatory requirements and minimize disruptions to its services.

The role of TPAP license

The National Payments Corporation of India (NPCI) is expected to grant a third-party application provider (TPAP) license to Paytm by the RBI's deadline. Notably, the license is crucial for Paytm to continue offering UPI payment services through its app despite the operational halt of PPBL.

TPAPs play a significant role in the UPI ecosystem, ensuring compliance with the guidelines set by NPCI and facilitating regulatory oversight.

Ensuring seamless migration and compliance

To avoid any disruption in services, the RBI has directed that customers and merchants with ‘@paytm’ handles be seamlessly migrated from PPBL to a set of newly identified banks. This directive underscores the importance of maintaining a stable and reliable digital payment infrastructure, especially for a major player like Paytm, which holds a significant market share in the UPI ecosystem.

Paytm's position in the UPI ecosystem

Despite the regulatory challenges, Paytm remains a key player in India's digital payment landscape. The company is the third-largest app for UPI payments in the country, processing billions of transactions monthly. The partnerships with major banks and the anticipated TPAP license are expected to solidify Paytm's position in the market, ensuring it continues to provide valuable services to its vast user base.