INDIAN lender Paytm Payments Bank got a much-sought after extension from the central bank to wind down its operations on Friday (Feb 16), even as its overseas transactions are under the scanner of the federal financial crime fighting agency.
The Reserve Bank of India (RBI) in a January order had asked Paytm Payments Bank, an associate of One 97 Communications or Paytm, to stop accepting any fresh deposits in its account, or popular wallet, from Feb 29. The deadline is now extended to Mar 15, RBI said.
The action was triggered by persistent and serious supervisory concerns. Earlier this week, the country’s crime fighting agency began looking into details of overseas transactions on the platform.
RBI said the deadline extension was to allow customers, including merchants, “a little more time” to make alternative arrangements.
“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 Mar 15, 2024,” it said.
Separately, the RBI also issued a detailed set of customer clarifications.
The regulator said customers can withdraw or use funds from their Paytm Payments Bank accounts and wallets till the time those funds are exhausted but they cannot add any fresh funds after Mar 15.
Customers who receive their salaries or other transfers including government subsidies into these accounts have to make alternate arrangements by mid-March.
Merchants using Paytm’s QR codes for accepting payments can continue to do so if these QR codes are linked to accounts other than those held by Paytm Payments Bank.
The bank has nearly a fifth share of India’s toll collections through a product called FASTag. RBI said these FASTags cannot be recharged or topped up after Mar 15.
Non-executive chairman of Paytm Payments Bank Vijay Shekhar Sharma has met with RBI officials and the finance minister seeking respite, but RBI governor Shaktikanta Das said on Monday that there would be no review of its decision. REUTERS
