The Reserve Bank of India (RBI) on Wednesday ordered Paytm Payments Bank to stop all forms of banking services including accepting deposits and processing of payments within a month. The central bank has put a freeze on all basic transaction services through Paytm’s various platforms using Unified Payments Interface (UPI), IMPS, Aadhaar-enabled payments and others, effective February 29.
Paytm Payments Bank must stop accepting deposits and credit transactions or any form of top-ups in its wallets too. New customer onboarding was banned for the bank from March 2022. Now, even existing customers will not be allowed to add money to the payments bank accounts.
To ensure funds held by consumers do not get stuck, RBI has allowed withdrawal and utilisation until a credit balance is available in the Paytm account. However, adding of fresh funds will not be permitted after February 29.
PPBL is also barred from offering certain banking services, including fund transfers, BBPOU, and UPI facility, effective from February 29, 2024. The termination of Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. is mandated by February 29, 2024.
To wrap up ongoing transactions, all pipeline transactions and nodal accounts initiated on or before February 29, 2024, must conclude by March 15, 2024, with no further transactions allowed afterward. Additionally, PPBL is directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Approval for onboarding new customers by PPBL will depend on specific permission granted by the RBI after reviewing the IT auditors’ report.
By Ranu Jain