RBI Bars Paytm Payments Bank From Accepting Fresh Deposits After Feb 29

New Delhi: The Reserve Bank of India (RBI) has imposed major business restrictions on Paytm Payments Bank, effective February 29, 2024. The central bank’s action comes in response to persistent non-compliance and supervisory concerns highlighted in a Comprehensive System Audit report.

As of February 29, 2024, Paytm Payments Bank is prohibited from accepting fresh deposits, conducting credit transactions, or allowing top-ups in customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. However, customers can freely withdraw or utilize their available balances without any restrictions.

The RBI emphasized that no additional banking services, including fund transfers (such as AEPS, IMPS, etc.), BBPOU, and UPI facilities, should be provided by the bank after the specified date. The directive also includes terminating the Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. by February 29, 2024.

Furthermore, Paytm Payments Bank is instructed to settle all pipeline transactions and nodal accounts by March 15, with no further transactions permitted thereafter. The RBI’s actions underscore its commitment to addressing regulatory non-compliance and ensuring a robust banking system.

This development follows the RBI’s earlier decision on March 11, where Paytm Payments Bank was barred from onboarding new customers based on the findings of the external auditors. The central bank’s interventions aim to rectify the identified issues and strengthen the overall regulatory framework.