RBI imposes curbs on Paytm Payment Bank, bars from accepting deposits
New Delhi: Acting against non-compliance of banking rules, the Reserve Bank of India (RBI) on Wednesday barred Paytm Payments bank from accepting deposits or credit transactions or top-ups in any customer accounts or any prepaid instruments such as wallets and FASTags after February 29, 2024.
The central bank had in March 2022 directed Paytm Payments Bank to stop onboarding of new customers under section 35A of the Banking Regulation Act, 1949.
“The 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 RBI said in a press release.
Accordingly, the banking regulator has now directed Paytm Payments Bank to stop taking deposits or credit transactions. Further, no-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.
However, 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.
“No other banking services, other than those referred in (ii) above, like fund transfers (irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facility should be provided by the bank after February 29, 2024,” the regulator said.
The RBI said that 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.
“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,” the RBI press release stated.