The Reserve Bank of India (RBI), exercising its authority under section 35A of the Banking Regulation Act, 1949, issued a press release on 31.01.2024 , directing Paytm Payments Bank Ltd (PPBL) to immediately halt the onboarding of new customers.
Audit Findings: Following a Comprehensive System Audit and subsequent compliance validation reports conducted by external auditors, persistent non-compliances and significant supervisory concerns were identified within PPBL. These findings necessitated additional supervisory measures.
RBI Directive: In accordance with its powers under section 35A of the Banking Regulation Act, 1949, and other relevant authorities, the RBI has issued the following directives to PPBL:
- Restrictions on Transactions:
- Effective February 29, 2024, PPBL is prohibited from accepting new deposits, credit transactions, or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., except for interest, cashbacks, or refunds as applicable.
- Withdrawal Accessibility:
- Customers are permitted to withdraw or utilize their balances from various accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., without any restrictions, up to their available balances.
- Limitation on Banking Services:
- From February 29, 2024, PPBL is restricted from providing banking services beyond withdrawals, including fund transfers (e.g., AEPS, IMPS), BBPOU, and UPI facilities.
- Termination of Nodal Accounts:
- The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. must be terminated promptly, no later than February 29, 2024.
- Transaction Settlement:
- All pending transactions and nodal accounts initiated on or before February 29, 2024, must be settled by March 15, 2024. No further transactions shall be permitted beyond this date.
These directives serve to address the identified concerns and ensure compliance within PPBL’s operations under RBI’s regulatory oversight.