Recorded RBI impact
Extension
Business restriction · Extension
Published by RBI
23 Feb 2024
Case Brief
The Reserve Bank of India, while acting under section 35A of the Banking Regulation Act, 1949, said that Paytm Payments Bank is already subject to business restrictions and that further steps are needed because it cannot accept additional credits into customer accounts and wallets after March 15, 2024. The release directs migration of @paytm UPI handles to other PSP banks, bars new users from being added until existing users are migrated, asks NPCI to evaluate One97 Communication Ltd’s TPAP request, and says merchants using PayTM QR codes should shift settlement accounts to other PSP banks. It also reminds customers holding accounts, wallets, FASTag, and NCMC issued by Paytm Payments Bank to make alternative arrangements before March 15, 2024.
Why RBI Acted
RBI had already imposed business restrictions on Paytm Payments Bank under section 35A of the Banking Regulation Act, 1949, via earlier press releases. This release adds operational steps to manage continued UPI usage for @paytm handles, including migration of handles to other PSP banks, no addition of new users until existing users are migrated, and alternative settlement arrangements for merchants using PayTM QR codes. Customers with accounts/wallets, FASTag, and NCMC issued by Paytm Payments Bank are advised to shift to other banks before March 15, 2024.
Operating Impact
Paytm Payments Bank’s customers, wallet holders, FASTag/NCMC users, and merchants using @paytm or PayTM QR codes must transition to alternative banks or handles to avoid service disruption. NPCI and other PSP banks are involved in enabling migration and continuity of UPI services, while OCL’s TPAP request and new-user onboarding are subject to conditions.
Regulatory Basis
- Section 35A of the Banking Regulation Act, 1949
Action Facts
- Primary Impact
- Extension
- Effective From
- 15 Mar 2024
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank
Related Entities
Entities similar to Paytm Payments Bank Ltd