RBI imposes restrictions on Paytm Payments Bank

• Reserve Bank of India (RBI) has imposed restrictions on Paytm Payments Bank and barred the entity from offering incremental banking services effective March 2024, due to concerns regarding breach of and compliance with regulatory norms.
• The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action. The regulator had, in March 2022, directed Paytm Payments Bank to stop on-boarding new customers and appoint an IT audit firm to conduct a comprehensive System Audit.
• Paytm Payments Bank will not be allowed to accept deposits or undertake credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and NCMC (National Common Mobility Cards), among others, post-February 29, 2024.
• However, any interest, cashback, or refunds may be credited anytime. Further, the entity will need to permit withdrawal or utilisation of balances by customers, including from their savings and current bank accounts, prepaid instruments, FASTags, and NCMC, without any restrictions and up to the available balance. Other than fund transfers, utilisation, or withdrawal, no other banking services and BBPOU (Bharat BillPay Operating Units) and UPI facility should be provided by the bank after February 29, 2024.

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Published date : 02 Feb 2024 01:13PM