Reserve Bank of India (RBI) imposes additional restrictions on Paytm Payments Bank Ltd (PPBL). Effective February 29, 2024, PPBL is prohibited from operating its mobile wallet and accepting further deposits.
The RBI cited persistent non-compliance as the reason for this action, stemming from a comprehensive system audit and subsequent compliance validation report.
Customers can still withdraw or use their balances in various accounts, including savings and current accounts, prepaid instruments, FASTags, and National Common Mobility Cards.
Additionally, the RBI directed the closure of nodal accounts belonging to One97 Communications Ltd and Paytm Payments Services Ltd by February 29, with further transaction settlements to be completed by March 15 for transactions initiated before February 29.
RBI’s Order and its Impact on Paytm Payments Bank
The RBI issued a directive to Paytm Payments Bank on January 31, 2024, stating that it has violated certain norms of the Payments and Settlement Systems Act, 2007. The RBI has not disclosed the exact nature of the violations, but it has imposed the following restrictions on Paytm Payments Bank:
- It cannot accept any new deposits from customers, or allow any credit transactions or top-ups to existing wallets or FASTags.
- It cannot issue any new wallets or FASTags, or renew or replace any existing ones.
- It cannot operate any payment systems, including the National Electronic Toll Collection (NETC) system, which enables the use of FASTags for toll payments.
These restrictions will remain in force until further notice from the RBI, or until Paytm Payments Bank complies with the norms.
As a result of these restrictions, Paytm customers will face the following consequences:
- They will not be able to add money to their wallets or FASTags or use them for any transactions, after February 29, 2024.
- They will not be able to use their FASTags for toll payments and will have to pay by cash or other means.
- They will not be able to open any new wallets or FASTags or get any replacements for damaged or lost ones.
What Customers Can Still Do with Paytm?
Despite the restrictions on Paytm Payments Bank, Paytm customers can still use some of the features and services offered by the platform. These include:
- They can still make digital payments through their Paytm accounts, as long as they link them to an external bank account or a debit or credit card. They can use Paytm UPI, QR code, or online payment modes for this purpose.
- They can still withdraw or use the available balance in their wallets or FASTags, before February 29, 2024. They can transfer the balance to their bank accounts, or use it for any transactions that are still allowed by Paytm Payments Bank.
- They can still access other services and products offered by Paytm, such as Paytm Mall, Paytm Money, Paytm Insurance, Paytm Postpaid, and Paytm First.
How to Deactivate Paytm FASTag?
If customers have a Paytm FASTag, they will need to deactivate it before February 29, 2024, to avoid any charges or penalties. This is because the FASTag will become inoperative after that date, and may cause delays or disputes at toll plazas. To deactivate the Paytm FASTag, customers need to follow these steps:
- Log in to the Paytm app or website, and go to the FASTag section.
- Select the vehicle number for which the FASTag is issued, and click on ‘Manage FASTag’.
- Click on ‘Deactivate FASTag’, and confirm the action.
- The FASTag will be deactivated within 24 hours, and the customer will receive a confirmation message.
Customers can also contact Paytm customer care at 1800-102-6480, or email at [email protected], to request for deactivation of their FASTag.
Paytm has assured its customers that it is working with the RBI to resolve the issues and restore its wallet and FASTag services as soon as possible. It has also apologized for the inconvenience caused and requested its customers to cooperate and follow the guidelines.
