RBI Allows Use Of Funds From Paytm Account Till 15 March 2024

In a significant development, Paytm Payments Bank (PPBL) finds itself under stringent business restrictions, as per the directives outlined by the Reserve Bank of India (RBI) in the notifications dated 31 January and 16 February 2024. These measures, enforced by regulatory authorities, are set to have substantial implications for existing account holders and users of various Paytm services. RBI in its recent press release has clarified what will the implications of the services offered by PPBL and Paytm and what to its customers.

Here's a breakdown of the key points highlighted in the press releases and accompanying frequently asked questions (FAQs)

Impact on Bank Accounts:

Existing account holders can continue to withdraw, transfer, or use funds from their savings or current accounts until 15 March 2024.

However, after this date, no deposits or transfers will be allowed, except for specific credits such as interest, cashback, sweep-ins, or refunds.

Salary, Subsidies and Automatic Payments:

Account holders receiving salaries, subsidies, or direct benefit transfers into their Paytm Payments Bank accounts must make alternative arrangements with another bank before 15 March 2024, to avoid disruption.

Automatic payments, such as electricity bills or OTT subscriptions, will continue until the available balance is exhausted. However, no further credits or deposits will be permitted after March 15, 2024.

Paytm Payments Bank Wallet, FASTag and NCMC:

Wallet users can continue to utilize their balances for transactions, but no top-ups or transfers will be allowed after 15 March 2024.

FASTag and NCMC services will remain operational until the available balances are used up, but no further top-ups or recharges will be permitted.

Balance transfers or refunds for these services will not be available, necessitating users to procure alternatives from other banks.

Business Correspondent Assistance:

Paytm Payments Bank Business Correspondents (Bank Agents) will facilitate withdrawals for account holders, subject to available balances.

Onboarding of New Customers:

Paytm Payments Bank remains under restrictions from onboarding new customers since 11 March 2022, further constraining its business operations.

These restrictions reflect a significant regulatory intervention aimed at addressing concerns and ensuring the stability of financial services provided by Paytm Payments Bank. Existing customers are advised to make necessary arrangements and adjustments to mitigate any potential disruptions to their financial activities the central bank stated.