Action against Paytm Payment Bank by RBI Under section 35A
Paytm Payments Bank has been ordered by the RBI to stop accepting fresh deposits in its accounts or popular wallets after February 29, 2024.
Paytm Payments Bank is part of one of India's largest payment firms Paytm
The Reserve Bank of India (RBI) on Wednesday ordered Paytm Payments Bank to stop accepting fresh deposits in its accounts or popular wallets after February 29, 2024.
Paytm Payments Bank, which is part of one of India's largest payment firms Paytm, was told by the regulator that it will not be able to take fresh deposits, facilitate credit transactions, or offer fund transfers, including Unified Payments Interface (UPI) facility after February 29.
"No further deposits or credit transactions or top ups shall be allowed 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," Yogesh Dayal, a chief general manager with the central bank, said in a press statement.
Why RBI put restrictions
A Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action, the RBI said, without disclosing details.
The action against Paytm Payments Bank was taken under Section 35A of the Banking Regulation Act, 1949, the central bank added.
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