RBI imposes ban on THESE services of Paytm Payment Bank; Changes effective after February 29

Paytm Payment Bank: This decision stems from non-compliance with regulatory guidelines, prompting the RBI to take decisive steps.

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Paytm Payment Bank: The Reserve Bank of India (RBI) has issued a noteworthy directive regarding Paytm Payment Bank, signaling changes set to take effect after February 29. The RBI's stringent actions include the prohibition of Paytm Payment Bank from accepting deposits and implementing credit transactions. This decision stems from non-compliance with regulatory guidelines, prompting the RBI to take decisive steps.

Banking Facilities Limited After February 29

Effective March 1, Paytm Payment Bank will face restrictions on various services, impacting both existing and potential customers. The RBI has specifically prohibited new deposits, top-ups, and credit transactions, affecting services such as wallets, FASTags, and mobility card top-ups. Additionally, Paytm Payment Bank will be restricted from adding new customers.

Withdrawal Options for Existing Customers

While the RBI imposes restrictions on certain banking services, existing customers need not worry about withdrawing their funds. The RBI has clarified that customers can freely withdraw funds from their savings accounts, current accounts, or any other linked accounts. The order emphasizes that customers can utilize their account balances without any restrictions, up to their available limits.

Supervisory Concerns and Nodal Account Termination

The RBI's decision stems from identified supervisory shortcomings and non-compliance issues during audits. The central bank has taken comprehensive action, including terminating the nodal accounts of Paytm's parent company, One97 Communications Ltd., and Paytm Payments Bank Ltd.

Paytm's Response and Ongoing Operations

As of now, neither Paytm nor its founder/CEO, Vijay Shekhar Sharma, has issued a response to the RBI's directive. It's important to note that this regulatory action primarily targets the banking operations of Paytm Payment Bank. Customers can continue to use Paytm as a digital payment option, provided their accounts are linked to external banks.

With this regulatory move, Paytm users are advised to stay alert and informed about the forthcoming changes in banking services, ensuring a seamless transition as the RBI's directives take effect.