The Reserve Bank of India (RBI) earlier this week took major action against Paytm Payments Bank Ltd (PPBL), the owner of Paytm, One97 Communications, citing “ongoing irregularities and ongoing significant regulatory issues”. It bars PPBL, which owns Paytm’s 330 million wallet accounts, from accepting deposits or recharges from any customer account, wallet, FASTag and other instruments after February 29. Here’s what customers need to know:
Which Paytm services will be affected by RBI’s action?
In its January 31 order, the Reserve Bank of India said, “No further deposits, credit transactions or recharges will be allowed in any customer account, prepaid instrument, wallet, FASTag, NCMC card, etc. after February 29, 2024, except for any Interest, cash back or refund credited at any time.”
The Reserve Bank of India said that after February 29, 2024, PPBL should not provide funds transfer (irrespective of the name and nature of services such as AEPS, IMPS, etc.), BBPOU and other banking services such as UPI.
The Nodal accounts of One97 Communications Ltd and Paytm Payments Services Ltd will be terminated at the earliest and in any event not later than February 29, 2024.
Settlement of all pipeline transactions and node accounts (for all transactions initiated on or before February 29, 2024) should be completed by March 15, 2024, and no further transactions will be allowed thereafter.
Which Paytm services will continue?
The Reserve Bank of India, however, said that customers will be allowed to withdraw or use balance from their accounts without any restrictions till the balance is available in their account.
“Paytm and its services will continue to operate after February 29 as most of the services offered by Paytm are with multiple banks (not just Paytm Bank),” One97 Communications said.
It added that the RBI directive was against Paytm Payments Bank and not Paytm.
No impact on user deposits in savings, wallets, FASTag, NCMC accounts: Paytm said it has been informed that the RBI’s action will not affect deposits in users’ savings accounts, wallets, FASTag and NCMC accounts and they can continue to use their existing balances.
Invest with Paytm Money Safe: Investments made by customers using Paytm Money are safe. The company assured that the recent RBI directive against Paytm associate banks will not affect the operations of Paytm Money Ltd (PML) or customers’ investments in stocks, mutual funds or NPS.
Loan and insurance allocations are not affected: Paytm clarified in its exchange filing that Paytm’s other financial services such as loan distribution and insurance distribution do not have any relationship with PPBL and are not expected to be affected by this direction.
Paytm payment gateway: Paytm payment gateway business (online merchants) will continue to provide payment solutions to its existing merchants. Paytm’s offline merchant payment network products (such as Paytm QR, Paytm Soundbox, Paytm Card Machine) will continue as usual, and new offline merchants can also be added.
PPSL will move nodes to other banks: Paytm said it will seek partnerships with various other banks to offer various payment products to its customers.
Paytm offline payment: Paytm has partnered with several leading banks in the country to provide acquiring services to merchants and will continue to expand third-party bank partnerships.
Bill payments are not affected: Even after the RBI directive, mobile recharges, subscriptions and other recurring payments will continue to proceed smoothly.
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