Mumbai: The Reserve Bank of India (RBI) on Wednesday banned Paytm Payments Bank Ltd (PPBL) from offering all forms of banking services including fund transfers via Unified Payments Interface, IMPS, Aadhaar-enabled payments and bill payment transactions, effective February 29, 2024.
The listed fintech major will also not be allowed to accept deposits, credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards (NCMC) other than any interest, cashbacks, or refunds.
However Paytm customers need not worry as they can continue to utilise balances from their accounts, including savings and current without restriction (and) up to their available limit.
“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. are to be permitted without any restrictions, upto their available balance,” said the RBI. You will also continue to receive deposit interest, cashback or refunds in your account.
In addition, the nodal accounts of Paytm's parent company, One97 Communications Ltd., and Paytm Payments Bank Ltd or PBBL, have been terminated by the central bank.
The RBI in a statement said that its “Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.” The regulator has already barred PPBL since March 11, 2022 from onboarding new customers.
“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.”
A payments bank is allowed to take small deposits up to Rs two lakh but are not allowed to lend directly. They can however sell loan products.
