Four to five banks will receive Unified Payment Interface-based payments businesses Paytm Payments Bank under RBI’s command over Paytm.

Paytm is moving existing accounts to these banks which RBI has asked not to onboard new users until the migration is complete. For business continuity, Paytm has informed that it will be migrating accounts to Axis Bank from its affiliate payments bank. Prior to that, the RBI asked Paytm to stop offering its banking services after March 15.

For smooth migration process, the RBI has instructed four to five banks to become payments service provider banks to Paytm. These banks are expected to capacitate high volumes of UPI transactions.

There are possibilities of major banks such as HDFC Bank, Axis Bank and Yes Bank becoming PSP for Paytm.

For now One97 Communications is enabling the continuation of merchant payments, the service that allows businesses to accept payments from customers using its platform, by creating settlement accounts with one or two banks.

Additionally, One97 Communications, earlier requested to become a third-party application provider for UPI channels, is under examination by the National Payments Corporation of India (NPCI) under RBI’s rule.

For the trade ended on Friday, shares of One 97 Communications registered five percent higher with their upper circuit limit at Rs.407.60 on BSE. Meanwhile, closed nearly flat was the benchmark sensex.

According to NPCI data, Paytm used its app to settle 1.4 billion UPI transactions in January. According to the data, 2.8 billion UPI payments were placed into Paytm Payment Bank accounts, and up to 410 million transactions were processed using these accounts.

Banks will now be able to enter the Paytm market thanks to the regulator's clarifications.

The National Common Mobility Card (NCMC) and Paytm FASTag will stop working on March 15, according to the RBI. Even Paytm wallet users ought to explore for other choices. This implies that starting on March 16, Paytm prepaid wallets and food wallets would stop working.

The RBI's decision on Friday puts an end to Paytm's banking and mobile wallet operations and places it on par with other fintech companies that provide UPI-based payment systems, such as Google Pay, Amazon Pay, and PhonePe.