Reserve Bank of India (RBI) has announced a ban on Paytm Payments Bank from doing deposits and credit transactions. An order dated, 31st January stated that effective February 29, 2024, no new deposits, credit transactions, or top-ups will be permitted in customer accounts, including prepaid instruments, wallets, FASTags, NCMC cards, etc. However, interest, cashbacks, or refunds may still be credited.
Following a Comprehensive System Audit report and subsequent compliance validation by external auditors, the RBI identified persistent non-compliances and ongoing supervisory concerns within the bank, prompting further regulatory measures.
The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. will be terminated, not later than February 29, 2024.
Customers will be allowed to withdraw or utilize balances from their accounts, including savings and current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., without any restrictions, up to their available balance.
According to the order, except for services mentioned, no other banking services such as fund transfers (including AEPS, IMPS, etc.), BBPOU, and UPI facilities will be provided by the bank after February 29, 2024.
Settlement of all pipeline transactions and nodal accounts initiated on or before February 29, 2024, shall be completed by March 15, 2024, with no further transactions permitted thereafter.
In 2022, RBI had banned Paytm Payments Bank from onboarding any new customers on their platform.
