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RBI gives 15-day relaxation to Paytm Payments Bank to stop deposits, credit transactions

RBI has asked Paytm Payments Bank to facilitate seamless withdrawal of customer deposits parked with partner banks.

Edited By: Ashesh Mallick @asheshmallick07 New Delhi Updated on: February 16, 2024 18:05 IST
RBI, Paytm, Paytm Payments Bank
Image Source : ANI Representative Image

The Reserve Bank of India has given 15-day relaxation to Paytm Payments Bank to stop deposits, credit transactions and top-ups in customer accounts, and extended the date to March 15 from the earlier stipulated timeline of February 29, 2024. RBI has also issued an FAQ in the Paytm case.

The RBI has also asked Paytm Payments Bank to facilitate seamless withdrawal of customer deposits parked with partner banks.

The RBI said this is being done keeping in view the interest of customers (including merchants) of PPBL who may require a little more time to make alternative arrangements and the larger public interest.

"Further, it is directed that the bank shall facilitate a seamless withdrawal of customer deposits that are parked with partner banks under the automatic ‘sweep-in sweep-out’ facility without causing any inconvenience to such customers," the Reserve Bank of India said.

The RBI had barred Paytm Payments Bank from taking deposits, credits, or processing top-up transactions in customer accounts due to persistent non-compliances. Additionally, the bank had earlier been prohibited from processing other banking services like UPI facilities and fund transfers starting February 29.

In yet another setback to Paytm Payments Bank, the Employees' Provident Fund Organization (EPFO) has issued a directive instructing its officers to exercise caution when handling claims linked to the Paytm subsidiary.

This development casts further shadows on the reputation of Paytm Payments Bank, which has been facing a series of hurdles in recent times. The EPFO's move signals concerns over the reliability and compliance standards of the bank, prompting a cautious approach from the government body responsible for managing employee provident funds. This comes after the RBI on January 31 directed the Paytm Payments Bank to stop accepting deposits or top-ups in customer accounts, wallets, FASTags and other instruments after February 29.

(With inputs from agencies)

 

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