RBI Bans Paytm Payments Bank, Paytm FASTags, Debit Card and Wallet Services will be down after 29th February as per RBI guidelines. Total Paytm banking services will be terminated with terms and conditions before the customers.
However, the CEO has not responded to this but it is mostly confirmed to stop its services soon. We bring how you can utilize the service to its best before the stoppage of its services.
What You Will Learn From This Article-
RBI Bans Paytm Payments Bank:
In March 2022 RBI ordered Paytm Payments Bank Limited to stop onboarding new customers with immediate effect from reports of audit of its IT systems. In October 2023 a fine of 5.39 crore was imposed due to noncompliance related to KYC and provisions of noncompliance of RBI guidelines in licensing Paytm payments bank. RBI stated there was no beneficiary owner related to onboarded entities for providing payout services (known as KYC) and also bank did not monitor transactions leading to a risk of customers availing payout services (one of RBI’s guidelines for payments banks)
What’s The Restrictions:
Now RBI imposed restrictions on several factors that account for Paytm payments to bank
- Deposits and credits will not be accepted by the bank from 29th February 2024.
- All the banking services related to Paytm payments bank will be terminated.
- The settlement of ongoing or scheduled nodal transactions will be completed by 15th March 2024.
- Paytm Payments Bank will not accept any new account creation.
- Wallet, Fastags, and mobility card services will be terminated after 29th February 2024.
The purpose of the nodal transactions is to confirm the collection of funds from customers and release the same to vendors without any delay in the process. The RBI made mandatory nodal accounts for intermediator ties of aggregators, payment gateways and E-commerce platforms.
Mobility cards are like debit cards used for similar purposes like paying bills, withdrawing, etc.,
A Big Failure For Paytm:
Restrictions on deposits and credits into the bank are according to section 35A of the Banking Regulation Act 1949 due to continuous non-compliance and supervision concerns in bank cited strict action further. The accounts of One97 Communications (parent company of Paytm) and Paytm Payments Services Ltd. Will be terminated as early as possible and before 29th February 2024.
RBI has been giving several warnings for the past 2 years related to non-compliance with its guidelines but the bank has not responded with positive signs which is leading to its shutdown ultimately.
Though the services are easy to access through the platform it has no security with potential threats which failed in compiling with RBI guidelines which is mandatory for any bank in India.
Paytm Shares Also See A Huge Decline:
As soon as the news came out about RBI Banning Paytm Bank Services, One 97 Communications Ltd Parent Company of Paytm saw a Huge Decline Stock Market
Paytm Notification Regarding Ban:
Paytm Started Sending Notification Regarding Ban Stating-
” Dear Customer,
The Reserve Bank of India (RBI) has issued a directive restricting Paytm Payments Bank Account/Wallet from accepting new deposits or allowing credit transactions after February 29, 2024.
Please note that you will not be able to deposit or add money to your Paytm Payments Bank Account/Wallet after Feb 29, 2024. However, there is no restriction on the withdrawal of money from your existing balance even after Feb 29, 2024.
The directive does not impact your existing balances and your money is safe with the Bank “
What Services You Can Use After Ban:
- Though the Paytm banking services will be down along with the transfer of funds between the Paytm banks the UPI services by external bank accounts can be processed without any concerns even after 29th February
- The available funds in the bank can be utilized before 29th February 2024 by any kind of transaction like Saving Bank account, Current account, Prepaid, FASTags and mobility services without any limitation.
- After February 29th wallet, fastags and mobility services will not be worked at any cost where the customers need to choose another platform for the relevant services.
Conclusion:
Paytm Payments Banking Ltd. services started in 2017 with the start of its services in November 2017. Paytm was the first company to launch UPI services in India along with entering into the banking sector later which is the only UPI company to do so.
It gained huge popularity in the initial days but later the market share declined resulting low valuation of the company along with issues from RBI that caused safety concerns in customers reflecting to decline in the user base too.
Now the bank is shutting down with no response from the CEO even after the announcement from RBI. Will this become the end of Paytm payments bank without any response from the company we have to wait and see.
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Also, Checkout What Ashneer Grover Said About This Ban – Read More