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On January 31, 2024, the Reserve Bank of India (RBI) barred Paytm Payments Bank from accepting fresh deposits and doing credit transactions after February 29, 2024, which was extended to March 15 2024.
RBI stated that the Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed continuous non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action.
During this time, Paytm customers must be worried and unsure about the services that will stop working after the end of the deadline. Here is a list of services that will be blocked or will remain operational after the deadline:
After the deadline, customers of the Paytm Payments Bank can withdraw and transfer money from their accounts. However, no deposit of funds in the account will be allowed after the deadline except for interest, cashback, refunds or sweep-ins.
Customers will not be able to transfer funds into their Paytm Payments Bank accounts through UPI/IMPS.
After March 15, Paytm’s UPI service will continue to be operational. On February 22, 2024, the RBI informed that customers and merchants having ‘@paytm’ handles are to be migrated seamlessly from Paytm Payments Bank to a set of newly identified banks to avoid any disruption.
They further added that to migrate from the ‘@paytm’ handle to other banks, the National Payments Corporation of India (NPCI) may facilitate the certification of about 5 banks as Payment Service Provider (PSP) Banks with established capabilities in order to process high-volume UPI transactions.
Paytm uses Paytm Payments Bank’s Payment Service Provider (PSP).
On March 14, 2024, the NPCI approved One97 Communications Limited (OCL), Paytm’s parent entity, to take part in UPI services as a Third-Party Application Provider (TPAP) under the multi-bank model.
Another important service of Paytm is FASTag, and customers can continue to use their FASTag to pay tolls till the available balance. However, after March 15, new top-ups are not allowed in the FASTags issued by Paytm Payments Bank.
National Highways Authority of India (NHAI) has urged Paytm FASTag users to shift to a new FASTag issued by another bank.
It is to be noted that you will not be able to transfer your existing FASTag balance issued by Paytm Payments Bank to another one.
Auto debit mandates will be operational only till there is a balance available in the Paytm Payments Bank account. After the deadline, i.e., March 15, 2024, as credit or deposits are not allowed in Paytm Payments Bank accounts, auto-debits will also become nonfunctional. Hence, RBI suggested customers shift to another bank to set up auto-debit EMIs.
Paytm Wallet, which is an important service of Paytm, will not be operational after March 15, 2024. Customers with existing balances in the Paytm Wallet will be able to make payments or transactions using the wallet.
Paytm Payments Bank issued a National Common Mobility Card (NCMC) and customers can use this card until the available balance. After the deadline, customers will not be able to load funds into the card.
According to the banking regulator, if your receipt and transfer of funds is linked to any bank account other than the Paytm Payments Bank, you can continue to use this arrangement even after March 15.
Overall, these are the guidelines set by RBI regarding the usage of Paytm’s services after March 15, 2024. On Friday, March 15, 2024, shares of One 97 Communications opened about 5% higher at ₹370.70 on the NSE.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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