The Reserve Bank of India has imposed fresh restrictions on Paytm’s Payments Bank, which handles transactions for the financial services behemoth Paytm. The new measures prohibit the bank from offering any banking services, including fund transfers, UPI transactions, accepting deposits, credit transactions, and top-ups in customer accounts, prepaid instruments, and wallets after February 29.
Key Takeaway
India’s central bank, the RBI, has imposed new restrictions on Paytm’s Payments Bank, barring it from offering various banking services due to persistent non-compliances and supervisory concerns.
Wednesday’s action comes after the Indian central bank directed Paytm Payments Bank to cease accepting new customer accounts in 2022. The RBI cited a comprehensive audit by external auditors that revealed “persistent” non-compliances and “continued material supervisory concerns” within the bank.
New Directives
- The RBI has instructed One97 Communications, the parent company of Paytm, and Paytm Payments Services to terminate their nodal accounts “at the earliest.”
- Customers are still able to withdraw funds from their accounts, according to the RBI.
Impact on Paytm
Without the nodal account, Paytm may need to transfer many of its operations to other banks, as indicated by initial assessments from industry executives.
