Amidst mounting challenges, Paytm Payments Bank finds itself embroiled in yet another setback as the Employees' Provident Fund Organization (EPFO) has issued a directive instructing its officers to exercise caution when handling claims linked to the Paytm subsidiary.
This development casts further shadows on the reputation of Paytm Payments Bank, which has been facing a series of hurdles in recent times. The EPFO's move signals concerns over the reliability and compliance standards of the bank, prompting a cautious approach from the government body responsible for managing employee provident funds.
EPFO issues circular
In a circular, the EPFO, which comes under the Ministry of Labour and Employment, stated, "All the field officers are advised to refrain from accepting claims associated with bank accounts in Paytm Payment Bank w.e.f February 23, 2024. A vide publicity should be initiated to raise awareness about this change."
This comes after the RBI on January 31 directed the Paytm Payments Bank to stop accepting deposits or top-ups in customer accounts, wallets, FASTags and other instruments after February 29.
Paytm Payments Bank's independent director resigns
Paytm Payments Bank Limited (PPBL) is an associate of One97 Communications Limited (OCL). One97 Communications holds 49 per cent of the paid-up share capital (directly and through its subsidiary) of PPBL. Vijay Shekhar Sharma has a 51 per cent stake in the bank. RBI said that persistent non-compliance by Paytm with the regulatory guidelines despite nudges over a period of time ultimately led to stern action against the fintech.
RBI on June 19, 2018, prohibited Paytm Payments Bank from opening any new account and wallet with effect from June 20, 2018, on account of supervisory concerns, which were lifted by RBI on December 27, 2018, with effect from December 31, 2018.
Meanwhile, Paytm Payments Bank independent director Manju Agarwal is learnt to have resigned from the board after an RBI order imposed restrictions on the bank's operations. According to a source, Agarwal resigned with effect from February 1. "Paytm Payments Bank independent director Manju Agarwal has resigned from the company's board after RBI order," news agency PTI reported citing sources.
(With PTI inputs)
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