Paytm Payments Bank Faces RBI Heat! New Client Onboarding Banned with Immediate Effect

Paytm: With immediate effect, the Reserve Bank of India (RBI) prohibited Paytm Payments Bank from accepting new clients on Wednesday. The central bank also forbade Paytm Payments Bank from taking deposits or top-ups in any customer account, prepaid device, wallet, or FASTag after February 29, 2024, according to a statement released on Wednesday.

RBI's Regulatory Action

The RBI's action against Paytm Payments Bank is the result of an external auditor's compliance validation report and a thorough system audit report. The central bank said in a statement that these reports demonstrated ongoing major supervisory concerns and chronic non-compliances within the bank, necessitating additional supervisory action.

"No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime," it said.

Client Withdrawal Options

The central bank further stated that, subject to their available balance, clients may withdraw or use funds from any of their accounts, including savings bank accounts, current accounts, prepaid cards, FASTags, and National Common Mobility Cards, without any limitations. In March 2022, the RBI ordered PPBL to cease accepting new clients immediately.

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