Paytm Banned: The Reserve Bank Of India on Wednesday barred PayTm Payments Bank From Offering It’s Core Services due to non compliance of Rules
The Reserve Bank of India, in exercise of its powers under section 35A of the Banking Regulation Act, 1949, has directed Paytm Payments Bank Ltd to stop accepting fresh deposits into customers accounts or wallets with effect from 29th Feb 2024.
The order by the RBI contained the below points.
(i) No further deposits or credit transactions or top ups shall be allowed in any customer
accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29,
2024, other than any interest, cashbacks, or refunds which may be credited anytime.
(ii) Withdrawal or utilisation of balances by its customers from their accounts including
savings bank accounts, current accounts, prepaid instruments, FASTags, National
Common Mobility Cards, etc. are to be permitted without any restrictions, upto their
available balance.
(iii) No other banking services, other than those referred in (ii) above, like fund transfers
(irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI
facility should be provided by the bank after February 29, 2024.
(iv) The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services
Ltd. are to be terminated at the earliest, in any case not later than February 29, 2024.
(v) Settlement of all pipeline transactions and nodal accounts (in respect of all transactions
initiated on or before February 29, 2024) shall be completed by March 15, 2024 and
no further transactions shall be permitted thereafter.
This came as a Shock in the industry as Paytm was considered as the leader in Payment aggregator system and UPI payments. This decision of RBI is certainly going to affect millions of customers ,specially the vendors who are using the soundbox payment system to receive money through UPI payments.
Customers of Paytm payments bank can continue to withdraw their deposits without any issue until the availability of funds in their account. The ban reportedly came after scrutiny of regulatory compliances.
The banking regulator RBI had, in March 2022, directed Paytm Payments Bank to stop onboarding new customers and appoint an IT audit firm to conduct a comprehensive System Audit
Also Read : Electoral Bonds Supreme Court Verdict : Why did supreme court ban it? Details Inside