NPCI Directs Banks to deactivate certain UPI IDs to counter banking frauds by December 31

Delhi : In a circular earlier this month, banks and payment applications were asked to deactivate UPI IDs and numbers that had been dormant for more than a year by the National Payments Corporation of India (NPCI). The guidelines are meant to stop consumers from unintentionally sending money to receivers if they change their mobile number without unlinking their previous number from the banking system, according to the NPCI circular dated November 7, 2023.

Paytm, PhonePe, and Google Pay are examples of UPI applications. Based on market size, these three UPI payment applications are the largest in the nation.

What users of UPI application must do?

Users that utilise UPI for any kind of application, such as Google Pay, PhonePe, Paytm, or another app, must make sure that their ID hasn't been inactive for longer than a year. Additionally, make sure that none of the phone numbers associated with their UPI IDs have been inactive for longer than three months by checking all of those.

Following a ninety-day period, telecom operators may provide deactivated mobile numbers to a new user in accordance with a directive issued by the Telecom Regulatory Authority of India (TRAI). Because the user might not have changed the phone number's linked mobile number, this could occasionally result in unintentional transfers. "It has been observed that customers sometimes change to new mobile numbers without dissociating their previous numbers from the banking system," according to the rules. By December 31, 2023, Third Party App Providers (TPAP) and Payment Service Providers (PSP) must comply with these new regulations.

In order to make sure of this, the NPCI circular emphasises how crucial it is for UPI users to routinely check and validate their information inside the banking system.