RBI has instructed Paytm Payments Bank Ltd. (PPBL) to stop onboarding new customers as a result of their persistent non-compliances of RBI regulations.
PPBL has been found guilty of non-compliance during RBI external audits after warnings throughout the past years. As a result, RBI has instructed the bank to stop onboarding new customers as of 31st Jan 2024.
No further deposits, credits, or top-ups are to be allowed in any accounts, wallets, FASTags, etc. after February 29, 2024, other than any interest, cashback, or refunds that may be credited anytime.
Fund transfers, BBPOU, or UPI facility will still be provided by the bank after February 29, 2024, as per RBI instructions.
Settlement of all pipeline transactions and nodal accounts (all transactions on or before February 29, 2024) should be completed by March 15, 2024, and no further transactions will be permitted after this.
Withdrawal or usage of balances by its customers from their accounts including bank accounts, prepaid, FASTags, etc. are to be permitted without any restrictions, up to their available balance.
Paytm payments bank shares have dropped almost 20% after RBI's press release. The potential adverse impact on their annual earnings will be around 300-500 Crores because of the RBI directive.