New Delhi: On January 31st, the RBI (Reserve bank of India) put restrictions on PPBL (Paytm Payments Bank Ltd) after a system audit report and compliance validation report by external auditors.
PPBL is prohibited from accepting any deposits and top-ups to their customer’s account, FASTags or wallets after 29th February. This action is taken under section 35 of Banking Regulation Act, 1949.
According to the RBI, the reports from those audits revealed continuous material supervisory concerns and non-compliance with the bank. The RBI also warned PPBL for further supervisory actions.
RBI said “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 further added “No other banking services like fund transfers (irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facilities should be provided by the bank after February 29, 2024.”
The central bank also stated that Nodal Accounts of Paytm payments Services Ltd and One97 communications are to be discontinued as soon as possible before February 29th.
Customers are allowed to withdraw and utilize their account balance including FASTags, National Mobility Cards, Saving Bank Accounts, Prepaid instruments and Current Accounts.
The RBI later added “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.”
Previously in March 2022, RBI had ordered PPBL to stop onboarding new customers with immediate effect.