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Business News/ Companies / News/  RBI extends Paytm Payments Bank transaction curb deadline to 15 March
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RBI extends Paytm Payments Bank transaction curb deadline to 15 March

The deadline to close nodal accounts of One97 Communications and Paytm Payments Services maintained by Paytm Payments Bank has not been extended

One97 Communications Ltd held a 49% stake in Paytm Payments Bank as of 31 March 2023. Paytm Payments Services is its subsidiary. (File Photo: Reuters)Premium
One97 Communications Ltd held a 49% stake in Paytm Payments Bank as of 31 March 2023. Paytm Payments Services is its subsidiary. (File Photo: Reuters)

Mumbai: The Reserve Bank of India (RBI) on Friday extended by 15 days the deadline for stopping deposit transactions at Paytm Payments Bank, part of One 97 Communications that runs the digital payments firm Paytm. Customers now have time till 15 March to deposit money into their accounts, wallets, FASTags, and prepaid cards.

The central bank said the extension aims to accommodate the needs of the payments bank's consumers and merchants who may need more time to make alternative arrangements, emphasizing that the move was in the public's best interest.

The RBI on 31 January directed Paytm Payments Bank to stop accepting deposits or top-ups in customer accounts, wallets, FASTags and other instruments after 29 February citing large scale non-compliance of regulations and supervisory concerns.

“No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after 15 March (extended from the earlier stipulated timeline of 29 February), other than any interest, cashbacks, sweep in from partner banks or refunds which may be credited anytime," RBI said on Friday.

Separately, the RBI also said on Friday that merchants or businesses accepting payments using a Paytm QR code, Paytm soundbox or Paytm PoS (point-of-sale) terminal can continue to use it even after 15 March if their receipt and transfer of funds is linked to a bank account other than Paytm Payments Bank.

However, the deadline to close nodal accounts of One97 Communications and Paytm Payments Services maintained by Paytm Payments Bank has not been extended.

One97 Communications Ltd held a 49% stake in Paytm Payments Bank as of 31 March 2023. Paytm Payments Services is its subsidiary.

Nodal accounts serve as an intermediary between customers, merchants, and financial entities like payment aggregators and gateways, holding customer payments before settling them with the merchants.

The RBI has reiterated that there were no restrictions on customers looking to withdraw or utilize balances from their accounts.

“It is also directed that withdrawals up to their available balance should be facilitated by the bank from all accounts and wallets, excluding the ones that are frozen or lien marked by law enforcement or judicial authorities," the central bank added.

Meanwhile, One97 Communications in a regulatory filing said that it has shifted its nodal account to Axis Bank, by opening an escrow account, to ensure "seamless merchant settlements as before."

"This arrangement is expected to seamlessly replace the nodal account that OCL (One97 Communications) was using with Paytm Payments Bank. Paytm Payment Services Ltd (PPSL), OCL’s wholly owned subsidiary has already been using the Axis Bank services, since its inception," the statement said.

Paytm app, and devices like Paytm QR, Soundbox, Card Machine will continue to work as always, the statement said citing a spokesperson.

Earlier this week, Amitabh Chaudhary, chief executive of Axis Bank, had reportedly said that the lender could work with Paytm if RBI permits.

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ABOUT THE AUTHOR
Shayan Ghosh
Shayan Ghosh is a national editor at Mint reporting on traditional banks and shadow banks. He has over 12 years of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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Published: 16 Feb 2024, 05:40 PM IST
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