The RBI on Wednesday barred Paytm Payments Bank Ltd from accepting deposits or top-ups to any customer accounts, prepaid instruments, wallets and FASTag after February 29, 2024. The Reserve Bank’s action against Paytm Payments Bank Limited (PPBL) comes after a comprehensive system audit report and compliance verification report by external auditors.
The RBI said in a statement that these reports revealed persistent non-compliance and continuing material supervisory concerns at the bank, necessitating further stringent action.
This service of Paytm will not work
RBI also informed that no deposit or credit transaction or top up, other than any interest, cashback or refund, will be allowed in any customer accounts, prepaid devices, wallets, FASTags, NCMC cards etc. after February 29, 2024.
The central bank further said that its customers will be allowed to withdraw or utilize the balance from their accounts including savings bank accounts, current accounts, prepaid instruments, Fastag, National Common Mobility Card etc.
Ban on adding new customers
Along with this, RBI had directed PPBL to stop adding new customers with immediate effect in March 2022. The RBI had last year barred Paytm Payments Bank from taking new customers and ordered a comprehensive audit of its IT systems, citing ‘material’ concerns observed at the bank.
The central bank said in a statement that Paytm Payments Bank had also violated the regulatory limit on end-of-day balance in some customer advance accounts who were availing payment services. The Reserve Bank further stated that the Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than February 29.
Paytm’s Payments Bank had become operational from May 23, 2017.