The Aryavarth Express
Agency (Delhi): The Reserve Bank of India (RBI) has taken significant action against Paytm Payments Bank Ltd (PPBL) under Section 35A of the Banking Regulation Act, 1949. This action is a result of persistent non-compliances and material supervisory concerns identified in the bank.
Here are the key directives issued by RBI:
In a press release dated March 11, 2022, RBI directed PPBL to cease onboarding new customers immediately, exercising its powers under Section 35A of the Banking Regulation Act, 1949.
Subsequent audits, including the Comprehensive System Audit report and compliance validation report by external auditors, revealed continued non-compliances and supervisory concerns, necessitating further supervisory action.
In light of these findings, RBI, invoking its powers under Section 35A of the Banking Regulation Act, 1949, and all other relevant powers, has issued the following directives to PPBL:
Deposits and Credit Transactions: After February 29, 2024, no further deposits, credit transactions, or top-ups will be allowed in customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. Exceptions include interest, cashbacks, or refunds that may be credited at any time.
Withdrawals and Utilization: Customers will be permitted to withdraw or utilize balances in their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., without any restrictions, up to the available balance.
Banking Services: Except for the services mentioned in (ii) above, no other banking services, including fund transfers (regardless of the name and nature of services like AEPS, IMPS, etc.), BBPOU, and UPI facilities, should be provided by the bank after February 29, 2024.
Nodal Accounts: The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. must be terminated promptly, but no later than February 29, 2024.
Pipeline Transactions: Settlement of all pipeline transactions and nodal accounts (related to transactions initiated on or before February 29, 2024) must be completed by March 15, 2024, and no further transactions will be allowed thereafter.
This action by RBI is a response to the ongoing non-compliance and supervisory concerns, with the aim of safeguarding the interests of customers and ensuring the stability of the banking sector.
