Paytm Payments Bank Is Shutting Down Or Not? Here's All You Need To Know

Just a day before the deadline for Paytm to shut all its financial operations related to Paytm Payments Bank, the National Payments Corporation of India (NPCI) gave a third-party application provider license to the fintech, said reports. Paytm can now continue providing UPI services to its customers with the help of a major bank like Axis, SBI, and Yes Bank.

However, Paytm still has to shut down its services for the Paytm Payments Bank following RBI's earlier directions, reports.

How It Is Going To Affect The Customers?

Just like other UPI applications, Phone Pay or Google Pay which have partnered with Yes Bank and Axis Bank, it is expected that Paytm will also join hands with a bank for smooth functioning and to avoid all the financial legal charges. A few media reports also suggested that UPI IDs registered with Paytm might be merged or migrated with partner banks now.

Notably, the company announced to transfer of customers' deposits and balances back to their linked bank accounts. Customers, who had used Paytm Payments Bank as their primary account for other transactions, would not be able to receive any cashback and refund now onwards in their Paytm Payments Bank account.

What Was The Case And Why RBI Ordered Paytm To Shut Its Services For Payments Bank?

In an order on January 31, 2024, the Reserve Bank of India barred Paytm Payments Bank from accepting any fresh deposits and all financial transactions after February 29 citing the Comprehensive System Audit (CSA) report and subsequent reports from external auditors, which revealed persistent non-compliance and continued material supervisory concerns.

On request from the One97, Paytm's parent company, RBI allowed an extension to the fintech to shut its operations till March 15, 2024.

Notably, the company announced to transfer of customers' deposits and balances back to their linked bank accounts.