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RBI action on Paytm, After 29 February 2024 all services related to Paytm Payment Bank will stop

RBI action on Paytm, After 29 February 2024 all services related to Paytm Payment Bank will stop

RBI action on Paytm, The Reserve Bank of India (RBI) has taken significant steps against Paytm Payments Bank on January 31. RBI has imposed several restrictions on this bank, including not being able to onboard new customers, accept deposits, and provide banking services to new customers after February 29. Additionally, the Reserve Bank has placed a ban on credit transactions, prohibiting Paytm Payment Bank from accepting new deposits and conducting credit transactions after February 29.

What about Paytm FASTag? , Paytm shares prices , Can merchants accept payments through Paytm? , Effect on Paytm POS and Soundbox services , Will the National Common Mobility Card (NCMC) work? , Will the Paytm app shut down? ,

Photo source: flickr.com


The Reserve Bank of India stated that after February 29, 2024, Paytm will not be allowed to accept any deposits, facilitate credit transactions, or top-ups in any form for its customers, including in accounts, prepaid instruments, wallets, fast tags, or NCMC cards. Despite this, customers can still withdraw remaining amounts from their accounts and use them. RBI has clarified that Paytm Payment Bank's customers will be allowed to withdraw and utilize funds from their accounts without any restrictions on savings accounts, current accounts, prepaid instruments, and fast tags, including National Common Mobility Cards (NCMC), without any imposed prohibitions.

The Reserve Bank of India (RBI) has taken action against Paytm Payments Bank Limited based on the comprehensive system audit report and compliance validation report by external auditors. RBI stated that the reports revealed concerns about non-compliance with regulations and material supervisory issues in Paytm Bank, prompting them to take appropriate measures.

What action has been taken on Paytm?

RBI has directed Paytm Payments Bank Limited not to allow deposits and top-ups in any form, including prepaid wallets and fast-track transactions, in any account after February 29, 2024. This regulatory move will bring about changes in the services offered by Paytm Payment Bank.

Will the Paytm app shut down?

No, if you are using the Paytm app and not availing services from Paytm Payments Bank, you will not face any issues due to these directives. You can continue your various activities such as mobile recharges, utility bill payments, etc. without disruption. Payments for bills can still be made through UPI from your bank accounts like SBI, HDFC, etc.

Will the National Common Mobility Card (NCMC) work?

According to Paytm's official handle, your NCMC card will remain active for current transactions, allowing you to conduct transactions using the existing balance.

Effect on Paytm POS and Soundbox services:

The RBI's decisions will not have any impact on your Paytm POS (Point-of-Sale) and Soundbox services. Paytm has clarified that they will continue to connect with new offline merchants, mainly used by shopkeepers or businesses employing this device.

Can merchants accept payments through Paytm?

If you are using UPI through Paytm, linked to other banks like SBI, ICICI, etc., you can continue to accept payments. However, merchants receiving funds in Paytm Payments Bank accounts will no longer be able to accept payments through the payment acceptance service due to RBI's directives.

What about Paytm FASTag?

Existing Paytm FASTag users can continue using their current balances, but after February 29, they will need to purchase a new tag.

Impact on Paytm loans:

Paytm users taking loans should ensure timely payments, as these loans are provided by third-party lenders. Delays or defaults may affect their credit score. Additionally, communication from the bank via calls or messages may occur for loan repayment.

Paytm's losses:

The RBI's directive to shut down nearly all services of Paytm Payments Bank after February 29 raises concerns of a potential impact on the company's annual operational profit, estimated at 300-500 crores. The decision could also affect the company's annual tax-pre-income. Despite this, Paytm remains hopeful of ongoing improvements in its profitability.

Paytm shares prices:

Following the Reserve Bank of India's actions, Paytm's share prices experienced a 20% drop. On the BSE, shares fell to 608.80 rupees, and on the NSE, they were at 609 rupees with a 19.99% decline. The market capitalization (MCAP) of the company also decreased to 38,663.69 crores after a 9,646.31 crores reduction. Notably, One97 Communications owns 49% of Paytm Payments Bank but operates as a supportive entity, not as a subsidiary.


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