NPCI To Approve Paytm Request For Third-Party Application License This Week

The National Payments Corp of India (NPCI) is likely to approve a third-party application provider license for Paytm, formally known as One 97 Communications, by March 15, three sources directly aware of the development said on Tuesday. The central bank is unlikely to extend the deadline of March 15 set for Paytm's banking unit, Paytm Payments Bank, to wind down its operations, one of the above sources and a fourth source aware of the central bank's thinking said.

The third-party application provider license will allow customers to continue using the Paytm app to make payments via India's popular unified payment interface after the banking arm winds down.

Last month, the central bank asked Paytm Payments Bank, an associate of Paytm, to wind down its business by March 15, leading to disruption for the popular payment app, which used the banking unit at the back end.

Paytm is the third largest app for UPI payments in the country, processing 1.6 billion monthly transactions, according to data available on the NPCI website. PhonePe and Google Pay are the two largest.

To keep Paytm QR codes running, the company may open settlement accounts with one or more banks, the RBI said.