Paytm Payments Bank has shifted its nodal account to Axis Bank to maintain seamless merchant settlements. The RBI has also issued customer clarifications, allowing customers to withdraw funds until exhausted but not adding fresh funds after March 15.
Paytm Payments Bank must stop taking new deposits on February 29 due to an RBI extension. Its nodal account is now with Axis Bank to streamline merchant settlements. The RBI has also clarified that consumers can withdraw funds until depleted but not add new funds after March 15.
Paytm Payments Bank has been given more time by the Reserve Bank of India to close, but its parent company has signed on a new banking partner to keep some of its popular products functioning and survive the crisis. Paytm Payments Bank, an OCL affiliate, was instructed by the RBI in January to stop taking new deposits in its accounts or wallets on February 29. On Friday, RBI extended the deadline to March 15.
“The company (Paytm) has shifted its nodal account to Axis Bank (by opening an escrow account) to continue seamless merchant settlements as before,” a release from Paytm.
Paytm QR codes, soundboxes, and card machines will work after March 15, the business said.
RBI officials cited Paytm Payments Bank’s chronic non-compliance for the measure. The ED started investigating platform international transactions this week.
RBI said the extension gave consumers, especially businesses, “a little more time” to make plans.
“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 March 15, 2024,” noted.
The RBI also provided extensive consumer clarifications.
Customer can withdraw or use monies from Paytm Payments Bank accounts and wallets till they run out, but they cannot add cash after March 15.
By mid-March, customers who receive salaries or government subsidies into these accounts must make new arrangements.
Merchants can continue to accept payments using Paytm’s QR codes if they’re linked to accounts other than Paytm Payments Bank.
FASTag gives the bank approximately a quarter of India’s toll revenue. The RBI stated FASTags cannot be recharged or topped up after March 15.
Paytm Payments Bank non-executive chairman Vijay Shekhar Sharma met with RBI officials and the finance minister to urge against the crackdown, but RBI Governor Shaktikanta Das stated on Monday that there would be no reassessment.
Conclusion
The Reserve Bank of India has allowed Paytm Payments Bank additional time to close, while its parent business has found a new banking partner to keep some of its popular products functioning and survive the crisis. The RBI directed Paytm Payments Bank to halt accepting new wallet or account deposits on February 29. To give customers and retailers more time to plan, the deadline was extended to March 15, 2024. FASTag, which cannot be recharged or topped up after March 15, gives the bank approximately a fifth of India’s toll earnings.
