In response to persistent supervisory concerns, the Reserve Bank of India (RBI) has granted an extension to Paytm Payments Bank, allowing it more time to wind down its operations. Initially instructed in a January order to cease accepting fresh deposits in its accounts or popular wallets by February 29, the bank’s deadline has now been extended to March 15, as announced by the RBI.
The decision to extend the deadline comes amidst scrutiny of the bank’s overseas transactions by federal financial crime fighting agencies. With the extension, customers and merchants are given additional time to make alternative arrangements, as emphasized by the RBI.
Following the extension, no further deposits, credit transactions, or top-ups will be permitted in any customer accounts, prepaid instruments, wallets, FASTags, or National Common Mobility Cards after March 15, 2024. However, customers will still be able to withdraw or use funds from their accounts and wallets until depletion, although they will not be able to add fresh funds beyond the specified date.
Customers receiving salaries, government subsidies, or other transfers into their Paytm Payments Bank accounts are advised to make alternate arrangements by mid-March. Merchants utilizing Paytm’s QR codes for transactions can continue to do so if linked to accounts other than those held by Paytm Payments Bank.
Additionally, the RBI noted that FASTags, which account for nearly a fifth of India’s toll collections, will not be rechargeable or top-up-able after March 15.
In light of these developments, Vijay Shekhar Sharma, the non-executive chairman of Paytm Payments Bank, has sought relief from RBI officials and the finance minister. However, RBI Governor Shaktikanta Das has stated that there will be no review of the decision.
The RBI’s decision to extend the deadline provides clarity for customers and stakeholders while ensuring a smooth transition for Paytm Payments Bank.
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