The ghost of Paytm’s now practically defunct banking arm Paytm Payments Bank continues to haunt the startup. A fresh row erupted on social media on July 23 after several Paytm users — both active and inactive — complained about their bank accounts linked to new UPI IDs on Paytm as part of a UPI migration by the company, seemingly out of the blue.

The problems started this week when Paytm began migrating UPI IDs of individual users to Axis Bank, Yes Bank, HDFC Bank, and SBI, after receiving a go-ahead in March from the National Payments Corporation of India (NPCI).

The transition from Paytm Payments Bank-linked UPI IDs (@paytm) to four new banks was well publicised but only Paytm knew when it would begin and what migration involves. This is perhaps why many users were caught unaware, and why many have raised data privacy concerns with the Reserve Bank of India and NPCI.

So what exactly happened and did Paytm overstep RBI and NPCI regulations, as many have claimed?

What Triggered User Concerns?

The primary concern raised by users was around Paytm forcefully linking accounts to new UPI IDs even when users did not request the change. Many users claimed to have not used Paytm for years, but since Paytm had created a UPI ID for them, these too were changed.

Others complained about the opt-out mechanism used by Paytm to inform users about the migration. This was an SMS with a shortened link, and given the spate of spam and UPI phishing, it was easy for many users to dismiss this message.

The SMS in........

© Inc42