Paytm Expected to Receive NPCI Third-Party App Provider License by March 15th

In a move offering some relief to fintech giant Paytm, the Reserve Bank of India (RBI) has extended the deadline for restrictions imposed on its payments bank subsidiary. The new deadline for Paytm Payments Bank to cease new deposits, credit transactions, and top-ups is now March 15, 2024, as opposed to the earlier February 29 deadline.

This decision comes after the RBI clamped down on Paytm Payments Bank in January, barring it from onboarding new customers or offering services like UPI and fund transfers. The extension aims to provide customers and merchants "a little more time to make alternative arrangements," according to the RBI.

While customers can now avail of services like UPI and fund transfers until March 15, Paytm will have to terminate its nodal accounts with One97 Communications and Paytm Payments Services by February 29. The bank must also settle all existing transactions in these accounts by March 15.

This partial reprieve comes after Paytm CEO Vijay Shekhar Sharma met with Finance Minister Nirmala Sitharaman and RBI officials seeking an extension. The company's stock price, which had plummeted over 50% in the past two weeks following the initial curbs, witnessed a revival after the RBI's announcement.

However, challenges remain for Paytm. The fintech major is still under investigation by the Enforcement Directorate for alleged forex violations, and its core merchant business continues to face uncertainty.