Case Brief
What Happened
The Reserve Bank of India, after a comprehensive system audit and compliance validation review, found persistent non-compliances and continued material supervisory concerns at Paytm Payments Bank Ltd. Under Section 35A of the Banking Regulation Act, 1949, RBI ordered the bank to stop accepting further deposits, credit transactions and top-ups in customer accounts, wallets, FASTags and NCMC cards after February 29, 2024 (subject to limited credits such as interest, cashbacks and refunds). It also barred the provision of other banking services such as fund transfers, BBPOU and UPI after that date. The bank may continue permitting withdrawals or utilisation of existing balances up to available amounts. In addition, nodal accounts of One97 Communications Ltd and Paytm Payments Services Ltd must be terminated by February 29, 2024, and all pipeline transactions and nodal account settlements completed by March 15, 2024.