RBI Takes Action Against Paytm Payments Bank Ltd, Modifies Business Restrictions

 

February 16, 2024

The Reserve Bank of India (RBI) has announced further measures against Paytm Payments Bank Ltd (PPBL) under Section 35A of the Banking Regulation Act, 1949, modifying the earlier business restrictions imposed on March 11, 2022, and January 31, 2024.

Key Directions:

1. Deposit and Transaction Restrictions: No additional deposits, credit transactions, or top-ups will be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after March 15, 2024 (extended from the earlier deadline of February 29, 2024), except for interest, cashbacks, sweep-ins from partner banks, or refunds.

2. Withdrawal Permissions: Customers can withdraw or utilize balances from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, without any restrictions, up to their available balance.

3. Cessation of Banking Services: From March 15, 2024 (extended from the earlier deadline of February 29, 2024), PPBL will cease providing banking services such as fund transfers (AEPS, IMPS, etc.), BBPOU, and UPI facility, except for withdrawals or utilization of available balances.

4. Termination of Nodal Accounts: The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd maintained by PPBL are to be terminated by no later than February 29, 2024.

5. Pipeline Transactions Settlement: Settlement of all pipeline transactions in nodal accounts (initiated on or before February 29, 2024) shall be completed by March 15, 2024, with no further transactions permitted thereafter.

Customer Facilitation:

- Withdrawals up to available balances should be facilitated by the bank from all accounts and wallets, excluding those frozen or lien-marked by law enforcement or judicial authorities.

- Seamless withdrawal of customer deposits parked with partner banks under the automatic 'sweep-in sweep-out' facility will be ensured without causing inconvenience.

Frequently Asked Questions (FAQs):

A list of FAQs has been released for the convenience of PPBL customers and the general public, addressing queries related to the modified directions.

The RBI, in taking these measures, emphasizes the interest of customers and the larger public interest while maintaining necessary business restrictions on PPBL.