RBI Directs Paytm Payments Bank To Stop Transactions; How Will It Affect Account Holders?

New Delhi: The Reserve Bank of India (RBI) has barred Paytm Payments Bank Limited (PPBL) from accepting deposits or top-ups in any customer account, including wallets and FASTags, from February 29.

“No further deposits or credit transactions or top-ups shall be allowed in customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime,” RBI’s directive stated.

RBI’s move obviously raises concerns about operations of Paytm Payments Bank.

RBI had directed PPBL to stop onboarding of new customers with immediate effect on March 11, 2022. However, the central bank said subsequent compliance validation report by external auditors revealed “persistent non-compliance” and continued material supervisory concerns in the bank.

However, RBI said exceptions to this restriction include allowance for interest, cashbacks, or refunds to be credited at any time.

Also, PPBL customers can withdraw or utilise balances from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. without any restrictions, up to the extent of their available balance.

February 29, 2024 onwards, however, PPBL will be restricted from offering any banking services beyond withdrawals and account utilisation.

Services such as fund transfers (including AEPS, IMPS, etc.), BBPOU and UPI facilities will be discontinued.

“Additionally, all pipeline transactions and nodal accounts, related to transactions initiated on or before February 29, 2024, must be settled by March 15, 2024,” RBI said.

“No further transactions will be permitted beyond this settlement deadline. The RBI’s stringent directives underscore the regulatory measures aimed at ensuring compliance and safeguarding the interests of customers within the digital payment ecosystem,” the central bank added.