Paytm Payments Bank Can’t Offer Services, Including Wallet, After Feb 29: RBI

The Reserve Bank of India on Wednesday barred Paytm Payments Bank Ltd from accepting deposits or allowing credit transactions, or top-ups, in customer accounts or prepaid instruments – such as wallets and FASTags – linked to those accounts, after February 29.

Customers can, however, continue to utilise balances from their accounts, including savings and current “without restriction (and) up to their available” limit, the Reserve Bank order said.

The RBI’s order cited “persistent non-compliances and continued material supervisory concerns in the bank” that were flagged after a comprehensive audit of its systems by external parties.

It follows a March 2022 order in which Paytm Payments Bank Ltd, or PBBL, was directed to stop taking on board new customers “with immediate effect”.

It is understood this order does not affect Paytm’s Unified Payment Interface, or UPI, arm.

Neither the company nor its founder/CEO, Vijay Shekhar Sharma, have responded so far.

Essentially the RBI action is against the banking operations of Paytm, meaning customers can continue to use Paytm as a digital payment option so long as their account is linked to an external bank.

In December Paytm’s struggling parent company, One97 Communication, laid off hundreds of employees across verticals after it began using AI, or Artificial Intelligence, to automate certain processes in a bid to up cost-cutting.

READ | Paytm Lays Off 100s After Induction Of AI To Cut Costs

The use of AI is meant to reduce costs, improve efficiency of operations, and remove redundant tasks, the firm said.