1. RBI directs Paytm Payments Bank Limited (PPBL) to stop accepting deposits and top-ups from February 29.
2. The central bank’s move signifies a significant intervention, raising concerns about the bank’s operations.
3. Decision suggests potential non-compliance issues with regulatory standards.
New Delhi, Jan 31: Reserve Bank of India (RBI) has directed Paytm Payments Bank Limited (PPBL) to cease accepting deposits or top-ups in any customer account, including wallets and FASTags, effective from February 29 onwards.
This decision signals a major intervention by the central bank, expressing concerns about the operations of Paytm Payments Bank and potential non-compliance.
The RBI had previously instructed PPBL to halt the onboarding of new customers on March 11, 2022.
However, a subsequent compliance validation report by external auditors revealed “persistent non-compliance” and ongoing material supervisory concerns within the bank.
As of February 29, 2024, PPBL is now barred from accepting additional deposits, engaging in credit transactions, or facilitating top-ups in any customer accounts, including prepaid instruments, wallets, FASTags, NCMC cards, and more.
Exceptions to this restriction include allowing interest, cashback, or refunds to be credited at any time. Customers are still permitted to withdraw or utilize balances from their accounts, covering various financial instruments, without restrictions, up to the extent of their available balance.
However, beyond withdrawals and account utilization, PPBL is restricted from offering any additional banking services effective February 29, 2024.
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This includes the discontinuation of services like fund transfers (including AEPS, IMPS, etc.), BBPOU, and UPI facilities.
The RBI has set a settlement deadline of March 15, 2024, for all pipeline transactions and nodal accounts related to transactions initiated on or before February 29, 2024.
No further transactions will be permitted beyond this settlement deadline.
The stringent directives from the RBI underscore regulatory measures aimed at ensuring compliance and safeguarding the interests of customers within the digital payment ecosystem.
This move reflects the central bank’s commitment to maintaining the integrity and stability of the financial sector.
