RBI Orders Paytm Payments Bank To Halt New Customer Onboarding After February 29

An order was issued by the Reserve Bank of India (RBI) instructing Paytm Payments Bank to refrain from onboarding new customers and to cease further deposits or credit transactions after February 29, 2024, on Wednesday.

In a press release dated March 11, 2022, the directive was issued by the Reserve Bank of India, utilizing its powers under Section 35A of the Banking Regulation Act, 1949, specifically directing Paytm Payments Bank Ltd (PPBL) to halt the onboarding of new customers with immediate effect reported ANI.

Photo Credit: PTI

RBI on Paytm Payments Bank

The Comprehensive System Audit report and subsequent compliance validation report by external auditors revealed persistent non-compliance and ongoing material supervisory concerns in the bank, necessitating further supervisory action.

In the exercise of its powers under Section 35A of the Banking Regulation Act, 1949, and all other relevant powers, Paytm Payments Bank Ltd (PPBL) has been directed by the Reserve Bank of India (RBI) to disallow additional deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, as reported by ANI.

The bank is permitted to credit interest, cashback, or refunds at any time. Withdrawal or utilization of balances by customers from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., is allowed without restrictions, up to their available balance.

Other banking services, except for those mentioned above, such as fund transfers (regardless of the name and nature of services like AEPS, IMPS, etc.), BBPOU, and UPI facilities, should not be provided by the bank after February 29.

The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, no later than February 29.

Settlement of all pipeline transactions and nodal accounts (for all transactions initiated on or before February 29) shall be completed by March 15, and no further transactions shall be permitted thereafter.