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RBI Bars Paytm Payments Bank From Accepting Deposits After February 29

Mumbai: The Reserve Bank of India has introduced further restrictions against Paytm Payments Bank and prohibited it from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, FASTags, and more after February 29.

However, customers are permitted to withdraw or utilize balances from their accounts, including savings bank accounts, without restriction up to their available balance.

The central bank stated that a Comprehensive System Audit report and following compliance validation report from external auditors identified recurrent non-compliance and serious supervisory issues in the bank, necessitating further supervisory action.

After February 29, 2024, no more deposits, credit transactions, or top-ups will be permitted in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, and so on, with the exception of any interest, cashback, or refunds, which may be credited at any time, according to the RBI.

The RBI, on the other hand, clarified that customers of the lender can withdraw or use balances from their accounts, such as savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, and so on, up to their available balance, without restriction.

Furthermore, the bank should not provide any additional financial services after February 29, 2024, other than those mentioned in (ii), such as fund transfers (regardless of the name or nature of the services, such as AEPS, IMPS, etc.), BBPOU, or UPI facility.

The central bank also requested that One97 Communications Ltd. and Paytm Payments Services Ltd.’s Nodal Accounts be terminated as soon as possible, but no later than February 29, 2024.

The RBI directed the payments bank to settle all pipeline transactions and nodal accounts by March 15 and no further transaction shall be permitted thereafter.

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