RBI Takes Strict Measures Against Paytm Payments Bank, Freezes Onboarding of New Customers

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Delhi, 31st January 2024: The Reserve Bank of India (RBI) has, under Section 35A of the Banking Regulation Act, 1949, issued directives to Paytm Payments Bank Ltd (PPBL). As of March 11, 2022, PPBL is instructed to cease the onboarding of new customers. The Comprehensive System Audit report, along with a subsequent compliance validation report by external auditors, has unveiled persistent non-compliances and supervisory concerns in the bank. In response, the RBI, exercising its powers, has outlined specific actions:


New Customer Onboarding: PPBL must immediately halt the onboarding of new customers.


Financial Transactions: After February 29, 2024, no further deposits, credit transactions, or top-ups are allowed in customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., except for interest, cashbacks, or refunds.


Withdrawals: Customers can freely withdraw or utilize balances from their accounts, including savings and current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., up to their available balance.


Limited Banking Services: After February 29, 2024, only specific services (withdrawals, etc.) will be permitted; fund transfers, BBPOU, and UPI facilities will be discontinued.


Nodal Accounts Termination: The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. must be terminated no later than February 29, 2024.


Pipeline Transactions: Settlement of all transactions initiated on or before February 29, 2024, and nodal accounts must be completed by March 15, 2024, with no further transactions permitted