Paytm Payments Bank Can't Accept Deposits, Credit Transactions After February 29 As RBI Imposes Additional Restrictions

Paytm Payments Bank Can't Accept Deposits, Credit Transactions After February 29 As RBI Imposes Additional Restrictions

Paytm Payments Bank Ltd cannot accept deposits or allow credit transactions, or top-ups, in customer accounts or prepaid instruments.

Rahul MUpdated: Wednesday, January 31, 2024, 06:00 PM IST
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Image: Paytm Payments Bank (Representative)

New Delhi, January 31: The Reserve Bank of India (RBI) imposed fresh restrictions on Paytm Payments Bank Ltd. In a statement released on Wednesday, January 31, the RBI said Paytm Payments Bank Ltd is not permitted to accept deposits or allow credit transactions, or top-ups, in customer accounts or prepaid instruments - such as wallets and FASTags - linked to those accounts, after February 29.

In March 2022, Paytm Payments Bank Ltd had been ordered by the RBI to stop onboarding of new customers with immediate effect. The additional restrictions on Paytm Payments have been imposed due to "persistent non-compliances and continued material supervisory concerns in the bank", said the RBI.

RBI Imposes Additional Curbs On Paytm Payments Bank

No Impact On Paytm UPI Services

The new restrictions, however, do not stop customers from utilising balances from their accounts, including savings and current, prepaid instruments, FASTags, National Common Mobility Cards, etc. up to their available limit. Also, they will not affect Paytm's Unified Payment Interface or UPI services.

"The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than February 29, 2024," the RBI ordered.

In October last year, the central bank had imposed a penalty of Rs 5.39 crore on Paytm Payments Bank for non-compliance with certain provisions, including Know Your Customer (KYC) norms. A show-cause notice was first issued after which the bank submitted its response. Later, the RBI had concluded that the charge of non-compliance with the aforesaid RBI directions was "substantiated and warranted imposition of monetary penalty" on the bank.

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