With a focus on the welfare of customers, including merchants, of Paytm Payments Bank Ltd (PPBL) who may need additional time to make alternative arrangements, as well as considering the broader public interest, the Reserve Bank of India (RBI) has issued modified directions under Section 35A of the Banking Regulation Act, 1949. These Directions, which partially modify earlier directives dated January 31, 2024, signify a balanced approach aimed at safeguarding stakeholders while ensuring regulatory compliance and stability in the banking sector.
Revised Directions Issued by RBI
In partial modification of earlier Directions dated January 31, 2024, the RBI has issued revised Directions for PPBL. Effective from March 15, 2024 (extended from the earlier deadline of February 29, 2024), the following measures are to be implemented:
- Deposits and Credit Transactions: No further deposits, credit transactions, or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc., except for interest, cashbacks, sweep-ins from partner banks, or refunds.
- Withdrawals: Customers are permitted to withdraw or utilize balances from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., without any restrictions, up to their available balance.
- Banking Services: Except for withdrawals or utilization of available balances, no other banking services, including fund transfers (such as AEPS, IMPS, etc.), BBPOU, and UPI facility, shall be provided by the bank after March 15, 2024. However, fund transfers for withdrawal purposes may be allowed at any time.
- Closure of Nodal Accounts: The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd maintained by PPBL are to be terminated at the earliest, no later than February 29, 2024.
- Pipeline Transactions: Settlement of all pipeline transactions in nodal accounts initiated on or before February 29, 2024, shall be completed by March 15, 2024, with no further transactions permitted thereafter.
Facilitation of Withdrawals and Seamless Deposit Withdrawal
PPBL is directed to facilitate withdrawals up to the available balance from all accounts and wallets, excluding those frozen or lien-marked by Law Enforcement or judicial authorities. Additionally, the bank must ensure seamless withdrawal of customer deposits parked with partner banks under the automatic ‘sweep-in sweep-out’ facility, without causing inconvenience to customers.
Also Read: RBI Takes Stern Action Against Paytm Payments Bank
Issuance of FAQs on Paytm
To provide clarity and assistance to customers of PPBL and the general public, a list of Frequently Asked Questions (FAQs) has been issued by the RBI. These FAQs aim to address common queries and concerns regarding the business restrictions imposed on PPBL.
In conclusion, the RBI’s imposition of business restrictions on PPBL underscores the regulator’s commitment to ensuring the stability and integrity of the banking system. By issuing revised Directions and facilitating seamless transactions, the RBI aims to mitigate any potential disruptions while safeguarding the interests of customers and the broader public.