LI Network
Published on: February 13, 2024 at 16:17 IST
Reserve Bank of India (RBI) Governor Shaktikanta Das has firmly stated that there will be no review of the central bank’s action against Paytm Payments Bank (PPBL).
The decision to curtail PPBL’s operations was made after a comprehensive assessment of the bank’s functioning. RBI, on January 31, directed PPBL to cease accepting deposits or top-ups in any customer accounts, wallets, FASTTags, and other instruments after February 29.
Governor Das, speaking at a press conference after the 606th meeting of the Central Board of Directors of the Reserve Bank of India, emphasized that the current decision stands without any reconsideration. He clarified that while RBI supports the fintech sector, it is equally committed to safeguarding customer interests and ensuring financial stability.
The central bank is expected to release a set of Frequently Asked Questions (FAQs) on the Paytm matter later this week. The RBI had previously barred PPBL from onboarding new customers on March 11, 2022, citing persistent non-compliances and supervisory concerns.
In its recent directive, RBI instructed Paytm Payments Bank not to accept deposits, credit transactions, or top-ups in various financial instruments after February 29, 2024.
However, the central bank allowed the crediting of interest, cashbacks, or refunds beyond this date. Customers are permitted to withdraw or utilize balances without restrictions, up to their available balance in accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards.
RBI also directed the termination of the ‘nodal accounts‘ of One97 Communications Ltd., the parent company of Paytm, which holds a 49% stake in Paytm Payments Bank Limited. Despite the ownership connection, Paytm Payments Bank is classified as an associate of One97 Communications, not a subsidiary.