RBI grants Paytm Payments Bank extension until March 15 to cease fresh deposits

New Delhi: The Reserve Bank of India (RBI) has granted Paytm Payments Bank an extension until March 15 to halt fresh deposits or top-ups in any customer accounts, wallets, or prepaid instruments, extending the previous deadline of February 29.

This decision is made in consideration of the interests of customers, including merchants associated with Paytm Payments Bank, who may require additional time to make alternative arrangements.

RBI has instructed the bank to ensure that customers can withdraw or utilise the balance amount in their accounts even after March 15.

On January 31, the central bank had prohibited Paytm Payments Bank from accepting new deposits or top-ups starting February 29, citing persistent non-compliance and ongoing material supervisory concerns. The extension provides an additional 15 days to comply with the directive.

In clarifications issued on Friday, RBI stated that customers will still be able to receive refunds and cashbacks in their Paytm Payments Bank accounts. However, after March 15, they will no longer be able to receive salaries, subsidies, or Aadhaar-linked direct benefit transfers.

For customers with FASTags issued by Paytm Payments Bank, the service can be used to pay tolls up to the available balance. Nevertheless, topping up or recharging FASTags issued by Paytm Payments Bank will not be possible after March 15.

While Paytm quick response (QR) codes, soundboxes, and card machines can continue to function beyond March 15, the restrictions on certain services aim to align with regulatory measures and ensure a smooth transition for customers.