Fact Check: No, Paytm Will Not Stop Working After February 29

Several users are uncertain about Paytm's operational status beyond February 29th, given a substantial setback to the fintech firm. This uncertainty arises as the Reserve Bank of India (RBI) has imposed restrictions on Paytm Payments Bank, instructing it to stop accepting fresh deposits. The directive mandates the suspension of all banking activities by the end of February. Despite this development, existing customers can still freely withdraw funds and use balances in prepaid cards or wallets without any constraints.

The RBI, in an official statement, revealed that an audit report had uncovered "persistent non-compliances and ongoing significant supervisory concerns within the bank, necessitating additional supervisory measures."

In response to these developments, Paytm CEO Vijay Shekhar Sharma reassured users on Friday morning, stating that Paytm's app would "continue working beyond 29 February as usual."

What Happens to Your Paytm Wallet After February 29th?

Confused about using your Paytm wallet after February 29th? Here's a simple breakdown:

Good news: You can still add money and transfer funds from your Paytm wallet without any restrictions.

Important change: Starting March 1st, you can no longer top up or transfer your wallet balance through Paytm Payments Bank.

No worries if:

Your UPI address is linked to another bank: Your Paytm UPI transactions will continue seamlessly.
You can use Paytm FASTag: It's not affected by these changes and will continue to work as usual.

Following the regulatory intervention, Paytm announced a temporary halt to its lending platform operations for a few weeks while engaging in discussions with banks for potential partnerships.

Bhavesh Gupta, COO of Paytm, mentioned, "Each lender will have concerns, and we are engaging with them. We are clarifying the impact this will have on the portfolio. They had questions, and we are providing answers in the processing."

During a conference call with analysts, Sharma acknowledged the gravity of the situation, stating, "This is an important moment for all of us; we have seen the update from RBI. The important thing is that we have been given directions, and we are taking immediate steps to comply."

The financial impact of the RBI directive on Paytm is estimated to be in the range of Rs 300-500 crore. The firm is now actively addressing the situation and working towards compliance with the regulatory directives.