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In response to regulatory directives from the Reserve Bank of India (RBI), Paytm Payments Bank, a subsidiary of One 97 Communications (OCL) – commonly known as Paytm, has taken proactive measures to navigate through its current operational challenges. The RBI had earlier instructed Paytm Payments Bank to cease accepting fresh deposits in its accounts and wallets by February 29, subsequently extending the deadline to March 15.
Amidst this regulatory pressure, Paytm Payments Bank has been granted additional time by the RBI to wind down its operations. However, in a bid to maintain service continuity for its customers, Paytm’s parent company has inked an agreement with a new banking partner.
In a statement released by Paytm, it was disclosed that the company has transitioned its nodal account to Axis Bank, thereby ensuring uninterrupted merchant settlements. This move is aimed at safeguarding the seamless functionality of popular Paytm products, including QR codes, soundbox, and card machines, beyond the stipulated deadline of March 15.
The regulatory intervention against Paytm Payments Bank stemmed from alleged persistent non-compliance with established regulations, prompting scrutiny from India’s financial crime fighting agency. While the RBI extended the deadline to facilitate customers and merchants in making alternative arrangements, it reiterated that no further deposits or credit transactions would be permitted after March 15.
Furthermore, the RBI issued detailed customer clarifications, emphasizing that customers could withdraw or utilize funds from their Paytm Payments Bank accounts and wallets until depletion, albeit without the option to add fresh funds post-March 15. Customers receiving regular deposits, such as salaries or government subsidies, were advised to make alternative arrangements by mid-March.
Additionally, merchants utilizing Paytm’s QR codes for payment acceptance can continue leveraging these codes if linked to accounts outside of Paytm Payments Bank. However, certain services, like FASTags for toll collections, would cease to be operational post-March 15.
Despite efforts by Paytm Payments Bank’s non-executive chairman, Vijay Shekhar Sharma, to engage with RBI officials and the finance minister in lobbying against the regulatory measures, RBI Governor Shaktikanta Das reaffirmed that there would be no reconsideration of the decision.
As Paytm navigates through this challenging period, the transition to a new banking partner underscores its commitment to maintaining service continuity and meeting the needs of its vast customer base amidst evolving regulatory dynamics.
Sources By Agencies
