The Reserve Bank of India (RBI) has imposed further restrictions on Paytm Payments Bank Limited (PPBL), effectively freezing its ability to accept new deposits, top-ups, and offer key banking services after February 29th, 2024. This move comes amidst concerns highlighted in an audit report detailing “persistent non-compliances and continued material supervisory concerns” at the bank.
The RBI’s action follows an earlier directive issued in March 2022, which prohibited PPBL from onboarding new customers. This latest directive significantly expands the restrictions, impacting existing customers as well.
What are the key restrictions imposed?
No new deposits, top-ups, or credit transactions: Effective March 1st, 2024, PPBL will no longer be able to accept any new deposits, top-ups, or initiate credit transactions across its services. This includes customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards (NCMC cards). However, interest, cashbacks, or refunds can still be credited to these accounts.
Withdrawals and balance utilization allowed: Customers can withdraw or utilize their existing balances without any restrictions. This includes savings and current accounts, prepaid instruments, FASTags, and NCMC cards.
Banking services limited: After February 29th, 2024, PPBL will only be allowed to offer basic withdrawal and balance utilization services. Essential banking services like fund transfers (AEPS, IMPS, etc.), Bharat Bill Payment System (BBPOU), and UPI facility will be discontinued.
Termination of Nodal Accounts: The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd., linked to PPBL, must be terminated by February 29th, 2024.
Settlement deadline: Existing transactions initiated on or before February 29th, 2024, must be settled by March 15th, 2024. No further transactions will be permitted beyond this deadline.
This decision by the RBI will undoubtedly impact existing PPBL customers who utilize the platform for deposits, top-ups, and various banking services. They will need to make alternative arrangements for these services after February 29th, 2024. The RBI has assured customers that their existing balances remain safe and can be withdrawn freely.