The Reserve Bank of India (RBI) has imposed restrictions on Paytm Payments Bank Ltd (PPBL), prohibiting further deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., after February 29, 2024. This action follows a Comprehensive System Audit report and a subsequent compliance validation report by external auditors, revealing persistent non-compliances and ongoing material supervisory concerns in the bank.
The RBI, in a statement on Wednesday, stated that withdrawal or utilization of balances by PPBL customers from various accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., will be permitted without restrictions up to their available balance. However, the bank will not be allowed to provide other banking services such as fund transfers (regardless of the name and nature of services like AEPS, IMPS, etc.), BBPOU, and UPI facility after February 29, 2024.
Additionally, the RBI order mandates the termination of Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. at the earliest, but no later than February 29. Settlement of all pipeline transactions and nodal accounts (related to transactions initiated on or before February 29, 2024) is required to be completed by March 15, 2024, with no further transactions permitted thereafter.
This regulatory action underscores the RBI's concerns about persistent non-compliances and supervisory issues within Paytm Payments Bank Ltd.
(With Agency Inputs)
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