The Reserve Bank of India (RBI) on January 31 imposed restrictions on Paytm Payments Bank Ltd (PPBL), following a system audit report and subsequent compliance validation report of external auditors.
PPBL is barred from accepting deposits or top-ups in any customer account, wallets or FASTags after February 29 under section 35A of the Banking Regulation Act, 1949.
The audit reports revealed persistent non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action, the RBI said in a statement.
“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,” it said.
“No other banking services 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,” the statement added.
The RBI further mentioned that the Nodal Accounts of One97 Communications and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than February 29, 2024.
However, the withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards are to be permitted without any restrictions, up to their available balance, the banking regulator said in a statement.
“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,” the central bank stated.
Earlier in March 2022, the RBI had directed PPBL to stop onboarding new customers with immediate effect.
