Why RBI Restricts Paytm Payments Bank from accepting Customer deposits?

Indian Banks regulatory authority Reserve Bank of India (RBI) bars Paytm Payments Bank from accepting deposits in the customer account from next month. RBI imposed this restriction on the platform on January 31, 2024. Also, the company cannot able to accept deposits in wallets or FASTages after February 29. The news went viral on the Internet and consumer are worrying about their existing fund balance in the Paytm payments bank.

As per the statement given by RBI, no further transactions can be done or the amount can’t be credited to the customer account of Paytm Payments bank. However, any type of cashback, refund, or interest will be credited to their account at any time. After the action taken on January 29, 2024, the Paytm payments bank is not able to accept deposits of customers from their savings bank account, prepaid instruments, FASTags, and NCMC Cards.

The Reserve Bank of India (RBI) has taken this action due to several reasons. The central bank said a Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.

Now comes the available funds in the customer’s Paytm payments bank account. Based on the statement, the withdrawal or utilization of the available fund balance is permitted without any restriction. The customers can use the available balance by paying bills, recharge, or any other payment they want to make.