NPCI set to approve Paytm request for third-party app license this week: Report

Paytm is likely to receive approval from the National Payments Corp of India (NPCI) for a third-party application provider licence, reported news agency Reuters.

The digital payments firm is expected to be given the nod by March 15. The licence will enable Paytm to continue serving its customers seamlessly through its app, even after the closure of its banking arm, Paytm Payments Bank.

Notably, the Reserve Bank of India is unlikely to extend the deadline of March 15 for Paytm Payments Bank to conclude its operations, as per the sources mentioned in the report.

The Reserve Bank of India (RBI) announced an extension of the deadline for customers of Paytm Payment Bank on February 16, 2024, to conduct deposits and credit transactions until March 15.

This move was made in response to the ongoing crisis surrounding the bank, which has sparked worries among both its customers and regulatory bodies.

"No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after March 15, 2024 (extended from the earlier stipulated timeline of February 29, 2024), other than any interest, cashbacks, sweep in from partner banks or refunds which may be credited anytime," said RBI in a notification earlier.

RBI issued a directive to Paytm Payments Bank, instructing it to cease accepting deposits or top-ups in any customer accounts, wallets, FASTags, and other instruments from February 29, 2024 onwards on January 31.

It highlighted persistent non-compliances and ongoing material supervisory concerns in Paytm Payments Bank Ltd, based on a comprehensive system audit report and subsequent compliance validation report by external auditors.

Consequently, the RBI imposed various restrictions on the bank. Additionally, on February 16, 2024, the RBI released a set of FAQs addressing concerns related to the Paytm crisis.