RBI action against Paytm Payments Bank, will not be allowed to...

India's central bank RBI has taken action against Paytm Payments Bank after an audit which found non-compliance. The bank will not be allowed to take further deposits in any customer accounts after February 29, RBI said. This means the bank cannot onboard new customers and accept deposits and top-ups in any customer accounts, wallets and FASTags from February 29, 2024. However, the central bank said that certain services will be allowed. 

On March 22, 2022, RBI directed Paytm Payments Bank Ltd to stop onboarding new customers with immediate effect. Withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. are to be permitted without any restrictions, up to their available balance.

"The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action," RBI said in a statement.

It also said that settlement of all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29) shall be completed by March 15 and no further transactions shall be permitted thereafter.