Paytm Assures Continued Functionality of QR Codes, Soundbox, and Card Machines Beyond March 15.
India’s Paytm Payments Bank has been given more time by the central bank to wind down its operations, while its parent company has signed on a new banking partner to try to keep some of its popular products running and survive its current crisis.
The Reserve Bank of India (RBI) in January ordered Paytm Payments Bank, an associate of One 97 Communications (OCL) – also known as Paytm, to stop accepting any fresh deposits in its accounts, or wallets, from Feb. 29. That deadline was extended to March 15, the RBI said on Friday.
“The company (Paytm) has shifted its nodal account to Axis Bank (by opening an escrow account) to continue seamless merchant settlements as before,” Paytm said in a release.
Paytm QR codes, soundbox and card machines will continue to work as before, even beyond March 15, the company added.
The action against Paytm Payments Bank was triggered by what RBI officials called persistent non-compliance with regulations. Earlier this week, India’s financial crime fighting agency began looking into details of overseas transactions on the platform.
RBI said the deadline extension was to allow customers, including merchants, “a little more time” to make alternative arrangements.
“No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc after March 15, 2024,” it said.
Separately, the RBI also issued a detailed set of customer clarifications.
The regulator said customers can withdraw or use funds from their Paytm Payments Bank accounts and wallets until the time those funds are exhausted but they cannot add any fresh funds after March 15.
Customers receiving salaries or government subsidies into their Paytm accounts must arrange alternatives by mid-March.
Merchants using Paytm’s QR codes can continue accepting payments if linked to non-Paytm accounts.
With nearly a fifth of India’s toll collections via FASTag, Paytm Payments Bank faces restrictions as RBI bars recharge post-March 15.
Despite lobbying efforts by Paytm’s non-executive chairman, RBI Governor Shaktikanta Das confirms no review of the decision.