RBI extends Paytm Payments Bank restriction deadline to March 15

In recent press releases dated February 16, 2024, significant business restrictions were imposed on Paytm Payments Bank. These restrictions have implications for various account holders and users of Paytm Payments Bank’s services.

Let’s dive into the details and understand how these restrictions affect different aspects of banking with Paytm Payments Bank.

Bank Accounts with Paytm Payments Bank

Continuity of Account Operations

For existing savings or current account holders with Paytm Payments Bank, the ability to withdraw money and use debit cards issued by the bank remains intact until March 15, 2024. Customers can utilize their account balances and conduct transactions as usual within this period.

Deposit and Transfer Limitations

However, after March 15, 2024, depositing or transferring money into these accounts will no longer be possible. Exceptions include credits such as interest, cashbacks, sweep-ins from partner banks, or refunds.

Handling of Deposits with Partner Banks

Deposits maintained with partner banks through ‘sweep in/out’ arrangements can still be transferred back to Paytm Payments Bank accounts within specified limits. However, fresh deposits with partner banks through Paytm Payments Bank will be disallowed after March 15, 2024.

Salary and Direct Benefit Transfers

Account holders receiving salary credits or direct benefit transfers linked to Aadhar will need to make alternative arrangements with other banks before March 15, 2024, as such credits will cease post this date.

Mandates and Automated Payments

Withdrawal/debit mandates, including payments for services like electricity bills and OTT subscriptions, will continue to be executed until account balances are depleted. However, no new credits or deposits will be allowed after March 15, 2024.

Paytm Payments Bank Wallet

Wallet Usage and Transactions

Wallet holders can continue to use, withdraw, or transfer funds until March 15, 2024, within the available balance. However, topping up or receiving credits into the wallet will be prohibited after this date, except for cashbacks or refunds.

Closure and Balance Transfer

Customers can close their wallets and transfer balances to accounts with other banks. Full KYC wallet holders can initiate this process through Paytm Payments Bank or its banking app.

FASTag, NCMC, and Other Services

Usage and Top-ups

Services like FASTag and NCMC issued by Paytm Payments Bank can be used until March 15, 2024, but no further funding or top-ups will be allowed thereafter. Users are advised to obtain alternatives from other banks to avoid inconvenience.

Merchant Payments

Merchants using Paytm services linked to other banks can continue operations as usual. However, those relying on Paytm Payments Bank accounts or wallets for payments will need to make alternative arrangements to receive credits.

Regulatory Compliance and Customer Support

Compliance with RBI Directives

The business restrictions imposed on Paytm Payments Bank, as per RBI directives dated March 11, 2022, continue to be enforced. Consequently, the bank cannot onboard new customers for any services since that date.

Handling Account Freezes

Accounts or wallets with liens or freezes due to law enforcement or judicial directives will be governed by the respective authorities’ orders. Paytm Payments Bank is obligated to facilitate withdrawals or transfers within available balances under such circumstances.

Frequently Asked Questions (FAQs)

1. Can I continue using my Paytm Payments Bank account after March 15, 2024?

Yes, existing account holders can continue to use their accounts until the available balance is depleted.

2. Can I transfer my wallet balance to another bank account?

Yes, full KYC wallet holders can close their wallets and transfer balances to accounts with other banks.

3. What should merchants using Paytm services do post-March 15, 2024?

Merchants linked to other banks can continue operations as usual, while those reliant on Paytm Payments Bank accounts or wallets should make alternative arrangements.