On January 31, 2024, Reserve Bank of India (RBI) issued notice to Paytm Payments Bank and restricted accepting fresh deposits and doing credit transactions after February 29.
No fund transfers will be allowed either, which means that unless Paytm finds a new banking partner or partners, it will not be able to offer most services on its app.
The decision comes after the central bank in March 2022 barred Paytm Payments Bank from onboarding new customers.
The Reserve Bank of India (RBI) said the action was taken due to Paytm Payments Bank’s non-compliance with rules and supervisory concerns, which a source with knowledge of the matter said had stretched over years.
Founder Vijay Shekhar Sharma took to his X (formerly Twitter), shared a post saying, “To every Paytmer, Your favourite app is working, will keep working beyond 29 February as usual.”
“I with every Paytm team member salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serving our nation in full compliance”, the post added.
The post further said, “India will keep winning global accolades in payment innovation and inclusion in financial services – with PaytmKaro as the biggest champion of it.”
To every Paytmer,
— Vijay Shekhar Sharma (@vijayshekhar) February 2, 2024
Your favourite app is working, will keep working beyond 29 February as usual.
I with every Paytm team member salute you for your relentless support. For every challenge, there is a solution and we are sincerely committed to serve our nation in full…
The company has also shared the following message for the customer:-
The Company has been informed that this does not impact user deposits in their savings accounts, Wallets, FASTags, and NCMC accounts, where they can continue to use the existing balances.
OCL, as a payments company, works with various banks (not just Paytm Payments Bank), on various payments products. OCL started to work with other banks since starting of the embargo. We now will accelerate the plans and completely move to other bank partners.
Going forward, OCL will be working only with other banks, and not with Paytm Payments Bank Limited. The next phase of OCL’s journey is to continue to expand its payments and financial services business, only in partnerships with other banks.
We offer acquiring services to merchants in partnership with several leading banks in the country and will continue to expand third-party bank partnerships. The Paytm Payment Gateway business (online merchants) will continue to offer payment solutions to its existing merchants.
OCL’s offline merchant payment network offerings like Paytm QR, Paytm Soundbox, Paytm Card Machine, will continue as usual, where it can onboard new offline merchants as well.
With regard to the direction on termination of the nodal account of OCL and Paytm Payments Services Limited (PPSL) by February 29, 2024, OCL and PPSL will move the nodal to other banks during this period.
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