RBI's Bold Move: Paytm Payments Bank Faces Stringent Action Under Section 35A

रिजर्व बैंक का सख्त कदम: धन्यवाद पेमेंट्स बैंक को धारा 35A के तहत कड़ी कार्रवाई का सामना करना होगा

Reserve Bank of India Takes Stringent Measures Against Paytm Payments Bank Ltd Under Section 35A

In a significant development, the Reserve Bank of India (RBI) has implemented severe actions against Paytm Payments Bank Ltd (PPBL) under Section 35A of the Banking Regulation Act, 1949, citing persistent non-compliances and supervisory concerns.

Key Points:

1. Cease on New Customer Onboarding:

   - In a Press Release dated March 11, 2022, the RBI had initially directed PPBL to halt the onboarding of new customers.

   - The subsequent Comprehensive System Audit report and compliance validation revealed ongoing non-compliances, leading to escalated supervisory actions.

2. Supervisory Directives Issued:

   - Under Section 35A of the Banking Regulation Act, 1949, the RBI has directed PPBL with immediate effect to:

     - Stop any further deposits or credit transactions after February 29, 2024.

     - Allow withdrawals or utilization of balances by customers without restrictions up to their available balance.

     - Cease providing banking services beyond basic withdrawals and utilization.

3. Termination of Nodal Accounts:

   - The RBI mandates the termination of Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd., no later than February 29, 2024.

4. Transaction Settlement Deadline:

   - Settlement of all pipeline transactions and nodal accounts, initiated on or before February 29, 2024, must be completed by March 15, 2024, with no further transactions permitted thereafter.

The RBI's stringent measures against PPBL highlight the gravity of continued non-compliances and supervisory concerns. These directives not only impact the bank's operations but also emphasize the central bank's commitment to maintaining regulatory standards and ensuring the stability of the banking sector.