The Reserve Bank of India (RBI) final week ordered Paytm Payments Bank to not take any additional deposits, conduct credit score transactions, or perform top-ups on any buyer accounts, pay as you go devices, wallets, or playing cards for paying highway tolls after February 29.
Paytm pockets customers can use their funds till their stability is depleted, however they will not be capable to add cash after February 29. If the RBI’s stance persists, top-ups for Paytm wallets will stop, and transactions via them will now not be potential.
What is Paytm Payments Bank?
Paytm Payments Bank Limited (PPBL) is affiliated with One97 Communications Limited (OCL), with OCL holding a 49 per cent stake in PPBL. Vijay Shekhar Sharma owns a 51 per cent stake within the financial institution. PPBL started operations as a funds financial institution on May 23, 2017, providing digital banking companies, together with financial savings and present accounts, fastened deposits, wallets, UPI, and FASTag.
Paytm Wallet, part of PPBL, dominates the phase, with customers conducting 24.72 crore transactions value over Rs 8,000 crore in December 2023.
Can you employ Paytm companies?
The RBI directive prohibits Paytm Payments Bank from accepting deposits or top-ups after February 29. However, customers can withdraw or use their balances with out restrictions till they’re exhausted. Paytm Wallet customers can proceed transactions till February 29 however can’t add cash thereafter. Similar guidelines apply to PPBL accounts and related companies like FASTag and the National Common Mobility Card.
Are there any alternate options?
Several banks and non-banking entities provide pockets companies, together with Mobikwik, PhonePe, SBI, ICICI Bank, HDFC, and Amazon Pay. For FASTag companies, customers can go for over 37 authorised banks, akin to SBI, HDFC, ICICI, IDFC, and Airtel Payments Bank.
Why did Paytm Payments Bank come below RBI scrutiny?
Issues akin to non-KYC-compliant accounts, cases of single PANs used for a number of accounts, and transactions exceeding regulatory limits in minimal KYC pay as you go devices raised considerations about cash laundering.
What has been Paytm’s response?
While customers can swap to different wallets and companies, Paytm administration is in discussions with the RBI to adjust to directives. Paytm assures that its monetary companies like mortgage distribution, insurance coverage distribution, and fairness broking, unrelated to PPBL, will stay unaffected. Offline service provider fee community choices will proceed as common.
How have the shares responded?
Paytm’s inventory witnessed a ten per cent decline, hitting the decrease circuit on February 5, extending the autumn to over 42 per cent within the final three periods. The inventory has confronted consecutive decrease circuits because the RBI’s curbs on its funds financial institution unit, dropping from Rs 761.4 to Rs 438.5 as of Monday morning.
(With PTI inputs)
