The Reserve Bank of India (RBI) on Wednesday barred Paytm Payments Bank from accepting fresh deposits and carrying out transactions from February 29 this year, citing “persistent non-compliance” and “material supervisory concerns”.
In March 2022, the regulator had barred Paytm Payments from taking in new customers. The company, of which One97 Communications Ltd is the parent, was at that time asked to appoint an external auditor to check its information technology systems.
“The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” said the RBI in its new order.
It said no further deposits or credit transactions or top-ups will be allowed in customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Card cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime.
The regulator banned the company from providing other banking services such as transfer of funds, Aadhaar Enabled Payment System, Immediate Payment Service, Bharat Bill Payment Operating Unit, and the Unified Payments Interface (UPI) facility.
Users can withdraw or completely utilise amounts in their accounts.
“The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than February 29, 2024,” said the RBI.
The regulator also said that settlement of all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) should be completed by March 15, 2024 and no further transactions shall be permitted thereafter.
The company is yet to respond to queries sent by ‘Business Standard’.
First Published: Jan 31 2024 | 6:52 PM IST