News Brief
RBI Limits Paytm Payment Bank's Services After Audit Reveals Persistent Non-Compliance
Paytm
Paytm Payments Bank (PPBL) faces severe restrictions from the Reserve Bank of India (RBI), as it has been prohibited from accepting deposits or top-ups in various customer accounts, prepaid instruments, wallets, and FASTags after 29 February as reported by The Indian Express.
The RBI's action comes in response to a comprehensive system audit report and subsequent compliance validation report by external auditors, which revealed persistent non-compliance and ongoing material supervisory concerns.
RBI's has stated, "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. are to be permitted without any restrictions, up to their available balance.”
However, after 29 February 2024, the bank is not permitted to provide other banking services, including fund transfers (regardless of service names like AEPS, IMPS, etc.), BBPOU, and UPI facilities.
The RBI further directed the termination of Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. at the earliest, but no later than 29 February.
Settlement of all pending transactions and nodal accounts related to transactions initiated on or before 29 February 2024, should be completed by 15 March 2024, with no further transactions allowed thereafter.
Paytm Payments Bank, which commenced operations on 23 May 2017, is now under stringent regulatory measures due to the findings of the system audit and compliance reports.
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