Blog

The Reserve Bank of India (RBI) on Friday extended the deadline for Paytm Payments Bank to suspend accepting deposits, pushing the cutoff date from February 29 to March 15, 2024.

“Keeping in view the interest of customers (including merchants) of PPBL who may require a little more time to make alternative arrangements and the larger public interest, the following Directions are issued by the Reserve Bank of India under section 35A of the Banking Regulation Act, 1949 in partial modification of the earlier Directions dated January 31, 2024,” the central bank said in a statement.

Per the directive, the central bank will no longer allow further deposits or credit transactions in customer accounts, prepaid instruments, or other mediums after the revised deadline, except for specific instances of interest, cashback, or refunds.

However, customers will continue to have unrestricted access to withdraw or use their available balances. Additionally, PPBL is prohibited from providing banking services beyond withdrawals after March 15, 2024, except for fund transfers necessary for customer withdrawal purposes.

Furthermore, nodal accounts with One97 Communications Ltd and Paytm Payments Services Ltd must be terminated by February 29, 2024, with the settlement of pending transactions to be completed by March 15, 2024, the RBI said.

RBI said that the bank must allow customers to withdraw money up to the amount they have in their accounts or wallets. However, if law enforcement authorities have frozen their accounts, they can’t withdraw money.

The company recently revealed that its subsidiaries are being investigated by the Enforcement Directorate. Reports say that it is a preliminary examination in light of possible violations of cross-border money transfer rules.

“One 97 Communications Limited, its subsidiaries, and its associate, Paytm Payments Bank Limited, have over time been receiving notices and requisition for information, documents and explanations from the Authorities, including Enforcement Directorate (ED), with respect to the customers that may have done business with the respective entities, and provided the required information, documents and explanations to the Authorities,” the company said in a statement to the stock exchanges.

(The copy will be updated with further details.)