Reserve Bank of India Halts Paytm Payments Bank from Accepting Deposits Post February 29.

In a significant move against Paytm Payments Bank (PPBL), the Reserve Bank issued a directive on Wednesday instructing the bank to cease accepting deposits or top-ups in customer accounts, wallets, FASTTags, and other instruments after February 29.

The decision stems from persistent non-compliances and ongoing supervisory concerns, as stated by the central bank. Following the RBI’s action on March 11, 2022, which prohibited PPBL from onboarding new customers, this latest directive marks a further step in addressing regulatory issues.

According to the RBI’s statement, effective February 29, 2024, no additional deposits, credit transactions, or top-ups will be permitted in customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards. However, customers may still receive interest, cashbacks, or refunds at any time.

Customers are allowed unrestricted withdrawal or utilization of balances from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards, up to their available balance.

The RBI specified that after February 29, 2024, the bank should only provide limited services such as fund transfers (including AEPS, IMPS, etc.), BBPOU, and UPI facilities, excluding other banking services.

Furthermore, the RBI mandated the termination of the ‘nodal accounts’ belonging to One97 Communications Ltd and Paytm Payments Services, with a deadline no later than February 29, 2024. One97 Communications, the parent company of the Paytm brand, holds a 49 percent stake in Paytm Payments Bank Limited, classifying it as an associate rather than a subsidiary.

To conclude, the settlement of all pipeline transactions and nodal accounts initiated on or before February 29, 2024, must be completed by March 15, 2024. No further transactions will be permitted thereafter, as per the RBI’s instructions. Previously, the Indian Highways Management Company (IHMCL) had restricted Paytm Payments Bank from issuing new FASTags, citing non-compliance with the prescribed parameters in the service-level agreement.

Leave a Reply

Your email address will not be published. Required fields are marked *