The Reserve Bank of India (RBI) has advised Paytm Payments Bank Limited (PPBL) to suspend deposits or top-ups to any customer account, including wallets and FASTags, beginning February 29. The central bank's move raises concerns about Paytm Payments Bank's actions and they suggests a regulatory intervention due to this issue.
The RBI has previously directed PPBL to stop onboarding new clients on March 11, 2022, effective immediately. However, later verification reports from external auditors indicated "continuous non-compliance" and persistent worries about the bank's materials oversight.
Effective February 29, 2024, PPBL is prohibited from accepting additional deposits, participating in credit transactions, or offering top-up services in any client account, including prepaid instruments, wallets, FASTags, NCMC cards, and so on.
The RBI added that interest, cashback, or refund concessions on deposits made at any time during the restriction period are among the exclusions to the rule.
Furthermore, PPBL customers may withdraw or use the available balance in their accounts, up to the specified limit, without restriction for a variety of transactions such as transferring funds to savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Card, and so on.
PPBL is also not allowed to provide any further banking services other than withdrawals and account usage until February 29, 2024. This includes the cessation of services such as fund transfers (NEFT, IMPS, etc.), BBPS, and UPI capabilities.
The RBI highlighted that all pending transactions and nodal accounts relating to transactions commenced on or before February 29, 2024 must be settled by March 15, 2024. Any transactions after this settlement deadline will be prohibited. These tough regulations are invented to assure complaina to protect the interests of digital customers.
