The audit reports revealed persistent non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action, the RBI said in a statement.
‘No further deposits or credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, NCMC cards, etc. after February 29, 2024, other than any interest, cashbacks, or refunds which may be credited anytime,’ the RBI statement said.
“No other banking services like fund transfers (irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facility should be provided by the bank after February 29, 2024,” the statement added.
The RBI further mentioned that the Nodal Accounts of One97 Communications and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than February 29, 2024.
However, the withdrawal or utilization of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards are to be permitted without any restrictions, up to their available balance, the RBI said.
‘Settlement of all pipeline transactions and nodal accounts (in respect of all transactions initiated on or before February 29, 2024) shall be completed by March 15, 2024, and no further transactions shall be permitted thereafter,’ the central bank stated.
Earlier in March 2022, the RBI had directed PPBL to ‘stop onboarding new customers with immediate effect.’
Clarifications issued by One97
- The RBI directives does not impact user deposits in their savings accounts, wallets, FASTags, and NCMC accounts, where the existing balances can be used.
- One97 will henceforth work with other banks and not with Paytm Payments Bank and that the next phase of its journey is to continue to expand its payments and financial services business, ‘only in partnerships with other banks.’
- The Paytm Payment Gateway business will continue to offer payment solutions to its existing merchants.
- 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.
- One97 and Paytm Payments Services will move the nodal to other banks during this period.
- One97 will pursue partnerships with other banks to offer various payments services to its customers.
- Other businesses like loan distribution, insurance distribution and equity broking are unaffected by this decision.