RBI directed Paytm Payments Bank to stop onboarding new customers starting January 31. Existing customers can still withdraw or use their balances without restrictions.
Effective January 31, 2024, Paytm Payments Bank is instructed by the RBI to cease onboarding new customers.
Existing customers are granted the freedom to withdraw or utilize their balances without any restrictions.
Following an audit report and subsequent compliance validation report by external auditors, the RBI identified the need for additional supervisory action on PPBL.
Regarding Paytm Payments, the external audit and compliance validation reports disclosed non-compliances, resulting in sustained material supervisory concerns.
From February 29, 2024, onward, no additional deposits, credit transactions, or top-ups will be permitted in customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., except for occasional interest, cashbacks, or refunds.
Withdrawals or utilization of balances in various accounts, including savings and current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., are permitted without limitations, up to the available balance.
Post February 29, 2024, Paytm Payments Bank will discontinue services beyond withdrawals, including fund transfers (irrespective of service names like AEPS, IMPS, etc.), BBPOU, and UPI facilities.
The Nodal Accounts of One97 Communications Ltd. and Paytm Payments Services Ltd. are to be terminated by February 29, 2024.
Settlement of all pipeline transactions and nodal accounts linked to transactions initiated on or before February 29, 2024, must be completed by March 15, 2024, with no further transactions allowed thereafter.
Update
Restrictions on Paytm’s payments bank business could be a precursor to license cancellation, according to a Reuters source. The restricted period aims to facilitate Paytm Payments Bank customers in unwinding deposits and minimizing systemic impact.
