The action has been taken after a Comprehensive System Audit report and subsequent compliance validation report…reports Asian Lite News
The RBI has barred Paytm Payments Bank Ltd (PPBL) from further deposits or credit transactions or top ups 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.
The action has been taken after a 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, the RBI said in a statement on Wednesday.
“Withdrawal or utilisation of balances by PPBL customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. are to be permitted without any restrictions, up to their available balance, the RBI order states.
Apart from this, no other banking services like fund transfers (irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facility should be provided by the bank after February 29, 2024, the order states.
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, according to the order.
Settlement of all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) shall be completed by March 15, 2024 and no further transactions shall be permitted thereafter, the order further states.
Meanwhile, Paytm shares plunged 20 per cent at the lower circuit on Thursday after RBI imposed severe restrictions on Paytm Payments Bank.
Paytm is trading at Rs 608.80 down 20.00 per cent on BSE.
Motilal Oswal Financial Services said in a report that the business outlook is highly uncertain and downgraded the stock to neutral.
Paytm Payments Bank Ltd (PPBL) is an associate company of PAYTM and has over 100m KYC customers. It also has 300m wallet users, 30m bank account holders and 17 per cent market share in FASTag by value.
Earlier, RBI in its previous press release dated 11th March directed PPBL to stop onboarding new customers. The regulator has now adopted a stricter stance, citing continued non-compliance and persistent material supervisory concerns.
Accordingly, the RBI on January 31, 2024 imposed stricter measures, thereby significantly limiting the scope of business activities for PPBL.
ALSO READ: Zooom Airline Back in Indian skies
