RBI Directs Paytm Payments Bank to Halt Most Services Post February 29
The Reserve Bank of India (RBI) has instructed Paytm Payments Bank (PPBL) to cease accepting deposits or top-ups in various customer accounts, wallets, FASTags, and other instruments after February 29. The directive, issued due to persistent non-compliances and ongoing supervisory concerns, also includes the termination of ‘nodal accounts’ associated with One97 Communications Ltd and Paytm Payments Services, with a deadline of no later than February 29, 2024.
While any interest, cashbacks, or refunds may still be credited to customers, PPBL is restricted from conducting further deposits, credit transactions, or top-ups in customer accounts after the specified date. Customers, however, are allowed unrestricted withdrawal or utilization of balances up to their available balance in accounts such as savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards. The directive specifically outlines that, after February 29, 2024, PPBL should only provide limited banking services, such as fund transfers, BBPOU, and UPI facilities, excluding other services.
Moreover, the RBI mandates the completion of settlement for all pipeline transactions and nodal accounts initiated on or before February 29, 2024, by March 15, 2024, with no further transactions permitted thereafter. Notably, Paytm group firm PPBL has refrained from commenting on the RBI’s directive. This development follows the RBI’s earlier decision on March 11, 2022, to prevent PPBL from onboarding new customers due to concerns raised at that time.
In a related incident, the Indian Highways Management Company (IHMCL), an arm of NHAI, had previously barred Paytm Payments Bank from issuing new FASTags, citing deviations from prescribed parameters in the service-level agreement.
