Paytm Payments Bank has been ordered by the RBI to stop accepting fresh deposits in its accounts or popular wallets after February 29, 2024.
New Delhi: The Reserve Bank of India (RBI) on Wednesday ordered Paytm Payments Bank to stop accepting fresh deposits in its accounts or popular wallets after February 29, 2024.
Paytm Payments Bank, which is part of one of India’s largest payment firms Paytm, was told by the regulator that it will not be able to take fresh deposits, facilitate credit transactions, or offer fund transfers, including Unified Payments Interface (UPI) facility after February 29.
“No further deposits or credit transactions or top ups shall be allowed in any 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,” Yogesh Dayal, a chief general manager with the central bank, said in a press statement.
Withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. are to be permitted without any restrictions, up to their available balance, the statement added.
Why RBI Has Put Restrictions On Paytm Payments Bank?
The RBI said it had in March 2022 asked the Paytm Payments Bank to stop adding new customers.
However, a Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action, the RBI said, without disclosing details.
The action against Paytm Payments Bank was taken under Section 35A of the Banking Regulation Act, 1949, the central bank added.
What Paytm Payments Bank Said On RBI Restrictions
Paytm Payments Bank, an associate of One 97 Communications Limited (OCL), said it is taking “immediate steps” to comply with the RBI’s directions.
OCL, as a payments company, works with various banks (not just Paytm Payments Bank), on various payments products, the fintech company said in a statement on Thursday.
Update: Paytm Payments Bank Limited, an associate of Paytm receives RBI directions. Paytm to expand its existing relationships with leading third-party banks to distribute payments and financial services products.
Read more here: https://t.co/NsPCOxp6VJ pic.twitter.com/fQjozyR11m— Paytm (@Paytm) January 31, 2024