The Reserve Bank of India (RBI) placed significant business limitations on Paytm Payments Bank on January 31. These restrictions include the inability to accept new deposits and conduct credit transactions in any customer account, prepaid instrument, wallet, or FASTags after February 29, 2024. Follow our guide to learn more about Fastag.
It further stated that credit transactions—including those made through wallets—will not be permitted. The central bank stated that customers will be able to use or withdraw their balances without any limitations.
In a statement, the RBI stated that these audit reports demonstrated significant supervisory concerns and long-term non-compliance within the bank, justifying further supervisory action.
The entire document detailing the RBI's action against Paytm Payments Bank Ltd. under Section 35A of the Banking Regulation Act of 1949 follows:
In a press release dated March 11, 2022, the Reserve Bank of India ordered Paytm Payments Bank Ltd. (PPBL or the bank) to cease onboarding new customers immediately, exercising its authority under section 35A of the Banking Regulation Act, 1949.
Persistent non-compliance and ongoing material supervisory concerns in the bank were revealed by the Comprehensive System Audit report and the external auditors' subsequent compliance validation report, which called for additional supervisory action.
Consequently, the Reserve Bank of India has instructed PPBL as follows today in the exercise of its authority under section 35A of the Banking Regulation Act, 1949, and all other authorities that it is empowered to exercise in this regard:
i. After February 29, 2024, no additional deposits, credit transactions, top-ups, or withdrawals will be permitted in any customer accounts, prepaid cards, wallets, FASTags, NCMC cards, etc.; the only exceptions will be interest, cashback, or refunds, which may be credited at any time.
ii. Up to their available balance, customers may withdraw or use funds from any of their accounts, including savings bank accounts, current accounts, prepaid cards, FASTTags, National Common Mobility Cards, etc., without any limitations.
iii. After February 29, 2024, the bank should stop offering any additional banking services beyond those mentioned in (ii) above, such as fund transfers (regardless of the name or type of service, such as AEPS, IMPS, etc.), BBPOUs, and UPI facilities.
iv. One97 Communications Ltd. and Paytm Payments Services Ltd.'s Nodal Accounts must be closed as soon as possible, but no later than February 29, 2024.
v. All process transactions and nodal accounts (relating to all transactions started on or before February 29, 2024) must be settled by March 15, 2024, at which point no more transactions will be allowed. For more updates download your car app Park+ now!