The Reserve Bank of India has prohibited Paytm Payment Bank Ltd from accepting new deposits or facilitating credit transactions, including top-ups, in customer accounts or associated prepaid instruments like wallets and FASTags after February 29.
However, customers are still allowed to use existing balances in their accounts, including savings and current accounts, without any restrictions, up to the available limit. Furthermore, the central bank has terminated the nodal accounts of Paytm’s parent company, One97 Communications Ltd., and Paytm Payments Bank Ltd.
Customer Can Use Their Remaining Balance From Paytm Payment Bank Without Any Restriction
The RBI has directed the termination of Nodal Accounts belonging to One97 Communications and Paytm Payments Services Ltd. This termination is required to be done as soon as possible, but definitely by February 29, 2024.
However, customers are allowed to withdraw or use the balances in their accounts, including savings, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards, without any restrictions, up to their available balance.
Why RBI Banned Paytm Payment Bank?
The RBI found that the Paytm Payment bank audits showed ongoing issues and concerns about not following rules properly. As a result, the RBI told the bank not to accept more deposits or process any credit transactions after February 29, except for interest, cashbacks, or refunds. This includes customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc.
As of now, neither the company nor its founder/CEO, Vijay Shekhar Sharma, have provided a response. According to sources, the Paytm app will still function normally, except for those associated with the Paytm Bank. These services will only be available until February 29 or until the existing balance is used up.
Wow. The RBI is really unhappy with #Paytm Payments Bank. pic.twitter.com/6WVqI97ey9
— Andy Mukherjee (@andymukherjee70) January 31, 2024
About Paytm Payment Bank
Paytm Payment Bank (PPBL) is a bank in India that started in 2017 and is part of the Paytm mobile payment company. It got permission from the Reserve Bank of India (RBI) to be a payments bank in the same year and officially launched in November 2017.
In 2021, the RBI gave it the status of a scheduled bank. Vijay Shekhar Sharma owns 51% of the bank, and One97 Communications owns 49%. Vijay Shekhar Sharma is the person who started Paytm Payments Bank, and One97 Communications Limited is a company associated with it.
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