Paytm Payments Bank customers assured refunds, timeline awaited after RBI action

Customers of Paytm Payments Bank Limited are awaiting clarity on when they will receive their money back after the Reserve Bank of India cancelled the bank’s licence, effectively pushing it toward closure.

Both the RBI and the bank have said that depositor funds are safe and will be returned. The bank stated it has sufficient liquidity to repay all customer deposits, including balances in savings and current accounts, wallets, FASTags, and other instruments. The RBI also confirmed that the bank can meet its full deposit liabilities during the winding-up process.

However, a clear timeline and mechanism for refunds have not yet been announced. Greater clarity is expected in the coming weeks as the wind-down progresses.

The bank, promoted by One 97 Communications and founded by Vijay Shekhar Sharma, had been under regulatory scrutiny since March 2022. In January 2024, the RBI barred it from accepting fresh deposits, citing persistent compliance issues.

Following these restrictions, many customers began withdrawing their funds. The RBI had allowed withdrawals and use of existing balances without limits but stopped most other banking services, including fund transfers and UPI, after February 29, 2024.

Before regulatory action began, the bank reported over 300 million wallets and 30 million bank accounts, with more than 100 million KYC customers. It also claimed to be a major issuer of FASTags.

As operations wind down, remaining customers are expected to either withdraw their balances or receive refunds through processes to be outlined by the bank and regulators. While the RBI’s move has effectively ended the bank’s operations, it has emphasised that safeguarding customer funds remains a priority.