The Reserve Bank of India (RBI) has announced an extension to the deadline for restrictions imposed on Paytm Payments Bank, which is now set for March 15. This decision follows public queries regarding the stringent measures implemented on January 31.
Extended Deadline And Implications
Initially slated for February 29, the new deadline offers customers and merchants additional time to arrange alternative solutions. Despite the extension, the nature of restrictions remains unchanged post-March 15.
Ongoing Restrictions
Post-March 15, Paytm Payments Bank will continue to provide limited services, restricted to fund transfers, BBPOU, and UPI facilities. Customers can still withdraw their available balances from all accounts and wallets, including savings and current accounts, as well as prepaid instruments like FASTags and NCMC.
Nodal Account Termination
The nodal accounts of One97 Communications Ltd. and Paytm Payments Services maintained by the bank are to be terminated no later than February 29. Additionally, all pipeline transactions in nodal accounts must be settled by March 15, with no further transactions permitted after that. Accounts frozen or marked by law enforcement or judicial authorities will be exempted from these restrictions. Furthermore, Paytm Payments Bank is directed to enable seamless withdrawals of customer deposits parked with partner banks under the ‘sweep-in sweep-out’ facility.
Background And Regulatory Response
The stringent curbs imposed on Paytm Payments Bank on January 31 responded to persistent non-compliance and major supervisory concerns observed by the RBI. These restrictions included a halt on fresh deposits, top-ups, and credit transactions in the bank’s accounts after February 29.
Governor’s Response
RBI Governor Shaktikanta Das emphasized that restrictions on regulated entities are proportionate to the gravity of the situation. He addressed media queries regarding Paytm Payments Bank after the monetary policy announcement. Thus highlighting the regulator’s commitment to maintaining stability and compliance in the financial sector. The deadline for Paytm Payments Bank restrictions is extended to March 15. Therefore, users should ensure timely withdrawals and explore alternative banking options. The RBI’s measures aim to safeguard customer interests and address regulatory concerns. Thus underscoring the importance of compliance and accountability in the banking sector.
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