Temporary Fix
(Tested in Owner and Private space, It may be extended to secondary user profiles IMO)
Owner profile with Play service enabled:
You only have to give Play services SMS access for it to work. The apps which let's you manually type the OTP, No need to give Play services SMS access.
In Private space with play services:
The problem that people are having of Banking apps not able to send SMS can be fixed if you have the same app installed in owner profile. I have tried it 3-4 banking apps and to my surprise it all worked. It maybe something related privilege these apps requires. you can uninstall apps in owner profile after the verification is complete and the apps work fine.
For the BHIM UPI, you'll have to give the Play services SMS access.
I didn't knew about this thread, I did reported this solution in Discord. Hope someone finds it useful.
someone can(please) test it in secondary profile and report if it works
P.S. I have also written mail to all of my Bank to fix this If it is a problem on their part. No positive news from them.