GUWAHATI: The Reserve Bank of India (RBI) has invoked Section 35A of the Banking Regulation Act, 1949, directing Paytm Payments Bank Ltd (PPBL) to cease onboarding new customers with immediate effect.
This regulatory action comes after the Comprehensive System Audit report and subsequent compliance validation report by external auditors highlighted persistent non-compliances and substantial supervisory concerns within the bank.
As a result of the findings, the RBI, utilising its powers under Section 35A and other relevant provisions, issued the following directives to PPBL:
• Ceasing New Transactions: Effective immediately, PPBL is prohibited from accepting new deposits, credit transactions, or top-ups in customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc., after February 29, 2024. Exceptions include interest, cashbacks, or refunds that may be credited at any time.
• Withdrawal Restrictions Lifted: Customers of PPBL are permitted unrestricted withdrawal or utilization of balances from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., up to their available balance.
• Curtailing Banking Services: Except for the services mentioned in point (ii), PPBL is barred from providing any other banking services, including fund transfers (such as AEPS, IMPS, BBPOU, and UPI facilities) after February 29, 2024.
• Termination of Nodal Accounts: The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are mandated to be terminated by no later than February 29, 2024.
• Pipeline Transactions Settlement: All pipeline transactions and nodal accounts, pertaining to transactions initiated on or before February 29, 2024, must be settled by March 15, 2024, with no further transactions allowed thereafter.