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The Reserve Bank of India (RBI) imposed sanctions on Paytm Payments Bank Ltd (PPBL) for “persistence non-compliance”, said Deputy Governor Swaminathan J, during a press meet after the Monetary Policy Committee meeting.

“This is supervisory action on a regulated entity for persistence non-compliance,” said Swaminathan. “Such actions are invariably preceded by months and at times years of bilateral engagement where we not only point out deficiencies but provide more than adequate time to take corrective action.”

PPBL has been prohibited by the central bank from accepting deposits or top-ups in any customer accounts, prepaid instruments, wallets, and FASTags, among other restrictions, after February 29.

The RBI may take further action after this deadline, and customers of PPBL will be unable to replenish their savings accounts or the widely-used digital payment wallet, Bloomberg reported.

On shifting merchants to different banks from PPBL, the deputy governor said, “In terms of what other banks will do is a business decision; they have got to carry out due diligence as per their board approved policies, and I am sure that they will carry out that.”

In the same press briefing, RBI Governor Shaktikanta Das, said, “We give sufficient time to every regulated entity to comply with the regulatory requirements, and some times it may look (like) more than sufficient time.”

Commenting on the RBI’s role, Das said, “We are a responsible regulator … If everything had been complied, I am talking about in a general sense, why should we act?”

According to reports, the RBI has declined to grant the concessions requested by Paytm’s founder and CEO Vijay Shekhar Sharma, during a meeting regarding issues at PPBL.

Sharma had sought an extension beyond February 29, 2024 for migrating accounts to other banks, but the RBI declined to assist PPBL in any way.