RBI has issued a notice to paytm payments bank Ltd. (PPBL) prohibiting it from taking on new customers and taking deposits across different services.
The notice, which will enter into force on February 29, follows a detailed system audit report which was then followed by compliance verification by external audit firms. The report revealed persistent non-compliances and serious supervisory issues within the bank.
According to the RBI’s statement, Paytm Payments Bank will no longer be allowed to accept deposits or top-ups in customer accounts, prepaid instruments, wallets, or FASTags.
However, customers with existing balances in their accounts, wallets, or FASTags can continue to withdraw or utilize them without any restrictions.
The central bank’s decision includes the termination of Nodal Accounts associated with One97 Communications Ltd and Paytm Payments Services Ltd, with the directive for expedited execution by February 29. This termination aligns with the identification of non-compliance issues, prompting the RBI to take swift supervisory action.
Moreover, the RBI has mandated the completion of all pending transactions and nodal account settlements initiated on or before February 29 by March 15, 2024. Any transactions beyond this date will not be permitted, as per the regulatory directive.
This development follows the RBI’s earlier move in March 2022, instructing Paytm Payments Bank to cease onboarding new customers immediately.
Paytm Payments Bank, an associate of the listed entity One97 Communications Ltd, which holds a 49% stake in the unit, is categorized as a payments bank. These entities are permitted to accept small deposits up to 2 lakh rupees but are restricted from direct lending activities.
Paytm users with existing account balances need not worry, as they are allowed to withdraw or utilize their funds without any hindrance.