RBI directs Paytm Payments Bank to stop onboarding new customers

Reserve Bank of India (RBI) on Wednesday directed Paytm Payments Bank Ltd (PPBL) to stop onboarding of new customers with immediate effect, for failure to comply with audit rules.

RBI decision comes after a comprehensive system audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, which warranted further supervisory action.

The central bank has asked Paytm Payments Bank to stop accepting deposits or credit disbursals, including top-up transactions in any customer account, prepaid instruments, wallets, FASTags, NCMC cards, etc after 29 February 2024. 

RBI has exempted payment of interest, cashbacks, or refunds which may be credited anytime.

Customers can also withdraw or utilise balances in their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc, without any restrictions, depending on their available balance.

Customers can also use AEPS, IMPS, BBPOU and UPI facilities provided by the bank beyond 29 February 2024. 

Paytm bank cannot provide any other services and 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 29 February 2024, RBI stated in its directive.

Paytm Bank should also complete settlement of all ongoing transactions and nodal accounts (in respect of all transactions initiated on or before 29 February 2024) by 15 March 2024, beyond which no transactions will be permitted.