The Reserve Bank of India (RBI) has extended the deadline for Paytm Payments Bank Ltd (PPBL) to cease specific transactions. The central bank has granted PPBL a 15-day reprieve, pushing the deadline to March 15. This move comes amidst ongoing efforts by the RBI to tackle supervisory concerns and ensure adherence to regulatory standards.
Originally slated for February 29, the directive issued by the RBI instructed PPBL to discontinue accepting deposits, credit transactions, and top-ups in customer accounts, wallets, and FASTags. However, the extension provides a welcome respite for PPBL, which has faced regulatory action and scrutiny from the RBI in recent times.
The extension not only offers relief to PPBL but also provides a critical buffer for customers and merchants who are scrambling to make alternative arrangements. To address concerns among PPBL customers and the broader public, the RBI has released a comprehensive set of Frequently Asked Questions (FAQs), aimed at providing clarity on the regulatory action and addressing common queries.
Despite previous interventions by regulatory authorities, compliance challenges within PPBL’s operations have persisted, particularly in adherence to Know Your Customer (KYC) regulations. This prompted the RBI to take further regulatory action, extending the deadline to allow PPBL customers a brief window to transition to alternative banking services.
While the extension grants temporary relief, the RBI remains firm on its directive, emphasizing that no further deposits, credit transactions, or top-ups will be allowed after March 15, except for certain permitted credits such as interest, cashbacks, and refunds. Additionally, the bank is directed to facilitate a seamless withdrawal of customer deposits parked with partner banks under the automatic ‘sweep-in sweep-out’ facility, without causing inconvenience to customers.
Merchants using Paytm’s QR code, soundbox, and PoS terminals can continue operating if linked to other bank accounts, offering some continuity beyond the extended deadline. However, withdrawal or debit mandates will cease after March 15, further underlining the urgency for PPBL customers to transition to alternative banking services.
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