The Reserve Bank of India (RBI) has ordered Paytm Payments Bank (PPBL) to cease almost all its services after February 29, resulting in an estimated impact of Rs 300–500 crore on the company's annual operational profit.
The central bank's action follows a comprehensive system audit report and compliance validation by external auditors. Starting February 29, 2024, PPBL is prohibited from accepting new deposits, credit transactions, or top-ups in customer accounts, prepaid instruments, wallets, FASTags, and more.
Customers are allowed to withdraw or use balances without restrictions, but other banking services like fund transfers and UPI facilities will be discontinued. The nodal accounts of One97 Communications Ltd and Paytm Payments Services Ltd. must be terminated by February 29, 2024.
Settlement of all pipeline transactions and nodal accounts initiated on or before February 29, 2024, should be completed by March 15, 2024. The RBI had previously directed PPBL to stop onboarding new customers in March 2022.
"Withdrawal or utilisation of balances by its customers from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. is permitted without any restrictions up to their available balance. No other banking services like fund transfers (irrespective of the name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facilities should be provided by the bank after February 29, 2024. 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, 2024," the RBI said.
"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," it added.
(With PTI inputs)
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