The Reserve Bank of India (RBI) has issued a directive prohibiting Paytm Payments Bank Limited (PPBL) from accepting deposits or top-ups in any customer account, including wallets and FASTags. The RBI order is effective from February 29 onwards.
This move by the central bank raises concerns about the operations of Paytm Payments Bank and signals a significant regulatory intervention in response to potential issues or non-compliance observed in the functioning of the bank.
RBI mentioned that it had directed PPBL to stop onboarding of new customers with immediate effect on March 11, 2022. However, the central bank said subsequent compliance validation report by external auditors revealed "persistent non-compliance" and continued material supervisory concerns in the bank.
Effective February 29, PPBL has been prohibited from accepting further deposits, engaging in credit transactions, or facilitating top-ups in any customer accounts, including prepaid instruments, wallets, FASTags, NCMC cards, etc.
The RBI said exceptions to this restriction include the allowance for interest, cashbacks, or refunds to be credited at any time.
Furthermore, customers of PPBL are permitted to withdraw or utilise balances from their accounts, encompassing savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., without any restrictions, up to the extent of their available balance.
However, as of February 29, PPBL is restricted from offering any additional banking services beyond withdrawals and account utilisation. This includes the discontinuation of services such as fund transfers (including AEPS, IMPS, etc.), BBPOU, and UPI facilities.
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