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Paytm Payments Bank faces RBI action, can't offer services after February 29

The RBI said that customers are permitted to withdraw or utilise balances from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards.

Akshit Tyagi Edited By: Akshit Tyagi New Delhi Updated on: January 31, 2024 18:37 IST
Paytm
Image Source : PAYTM Paytm

The Reserve Bank of India (RBI) has taken the decision to prohibit Paytm Payments Bank Ltd (PPBL) from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, FASTags, and more after February 29, 2024. The action by the RBI is a result of a comprehensive system audit report and subsequent compliance validation report by external auditors, which identified persistent non-compliances and ongoing material supervisory concerns at the bank.

In a statement, the RBI said that, due to the findings, further supervisory action is necessary, and from February 29, 2024, no new deposits, credit transactions, or top-ups will be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. 

"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," it said.

The central bank clarified that customers are permitted to withdraw or utilise balances from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards, without any restrictions, up to their available balance.

"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. is permitted without any restrictions up to their available balance. No other banking services like fund transfers (irrespective of the name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facilities should be provided by the bank after February 29, 2024. The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than February 29, 2024," the RBI said.

"Settlement of all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) shall be completed by March 15, 2024 and no further transactions shall be permitted thereafter," it added.

In March 2022, the RBI had previously directed PPBL to halt onboarding new customers with immediate effect.

(With PTI inputs)

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