RBI orders Paytm Payments Bank to stop FASTag, wallet servcies

In what would come as a significant blow to its operations, Paytm has been barred by RBI to onboard new customers and not accept deposits across many of its services. Following a thorough system audit report and subsequent compliance validation by external auditors, the Reserve Bank of India (RBI) has imposed restrictions on Paytm Payments Bank, effective February 29. Paytm Payments Bank Ltd (PPBL) will no longer be permitted to accept deposits or top-ups in customer accounts, prepaid instruments, wallets, or FASTags.
“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,” the RBI said in a statement said.
Users who have balance in their accounts, wallets or FASTags don’t have to worry as RBI has said they can continue to withdraw or utilise it without any restrictions.
The RBI’s decision stems from the identification of persistent non-compliance issues and significant supervisory concerns within the bank. In response to these findings, the RBI announced the termination of Nodal Accounts belonging to One97 Communications Ltd and Paytm Payments Services Ltd. These terminations must be executed expeditiously, no later than February 29, the apex banking institution noted.
Furthermore, the RBI directive mandates the completion of all pending transactions and nodal account settlements (pertaining to transactions initiated on or before February 29, 2024) by March 15, 2024. Subsequent transactions beyond this date will not be permitted.
Paytm so far hasn’t commented on the matter.