RBI Extends Paytm Bank Deadline: What Users Need to Know

The Reserve Bank of India (RBI) has extended the deadline for setting up Payment Banks and conducting other transactions until March 15th. Today, on Friday, February 16th, the RBI has announced a circular regarding this matter. In the past few days, the central bank has received numerous queries from the public. Based on these, the RBI has also published FAQs (Frequently Asked Questions).

Previously, in a circular issued on January 31st, the RBI had stated that after February 29th, money cannot be deposited into the accounts of Payment Banks. These banks will not be able to accept deposits for wallets, prepaid services, Fastag, and other services.

Paytm has announced a partnership with Axis Bank for merchant payment settlements. The company released a press release stating that Van97 Communications has transferred its nodal account to Axis Bank and has opened an escrow account in the bank.

Van97 Communications stated that after transferring the nodal account to Axis Bank, business operations will continue without any disruption. The company and RBI have confirmed that Paytm QR, soundboxes, and card machines will continue to operate for all merchants even after March 15th according to the agreement.

RBI’s Questions and Answers Announcement:

Question 1: I have savings or current account with Paytm Payments Bank. Can I continue to withdraw from this account after March 15, 2024? Can I continue using my Paytm Payments Bank-declared debit card?

Answer: Yes. You can continue to withdraw funds from your account and use your debit card to access available balances until then. Similarly, you can continue to use your debit card to withdraw available balances from your account.

Question 2: I have savings or current account with Paytm Payments Bank. Can I deposit money into this account after March 15, 2024?

Answer: No, you will not be able to deposit money into your Paytm Payments Bank account after March 15, 2024. Except for interest, cashback, sweep-in, or refund, other credit or deposit is not allowed.

Question 3: My salary is credited to my Paytm Payments Bank account. Can I continue to receive my salary into this account?

Answer: No, you will not be able to receive any credit in your Paytm Payments Bank account after March 15, 2024. To avoid inconvenience, you should explore alternate arrangements with any other bank before March 15, 2024.

Question 4: I have a Paytm Payments Bank wallet. Can I continue to use this wallet for transactions after March 15, 2024?

Answer: Yes, you can continue to use the funds available in your wallet for transactions to any other wallet or bank account. However, usage of wallet will be limited to only business transactions for minimum KYC wallets.

Question 5: I have a Paytm Payments Bank wallet. Can I top-up or transfer money into this wallet after March 15, 2024? Can I receive money into this wallet from another individual after March 15, 2024?

Answer: No, after March 15, 2024, you will not be able to receive any credit other than cashback or refunds into your wallet, nor will you be able to transfer funds into the wallet.

Question 6: I have a FASTag issued by Paytm Payments Bank. Can I continue to use it for toll payments after March 15, 2024?

Answer: Yes. As long as there are balances available, you can continue to use your FASTag for toll payments. However, post March 15, 2024, no top-ups will be allowed. To avoid inconvenience, purchase a new FASTag.

Question 7: I am a merchant and accept payments using Paytm QR code, Paytm Soundbox, or Paytm POS terminal linked to my bank account (not Paytm Payments Bank). Can I continue to use this setup after March 15, 2024?

Answer: Yes. If your setup is linked to a bank account other than Paytm Payments Bank, you can continue to use it even after March 15, 2024.

Question 8: I am a merchant and accept payments using Paytm QR code, Paytm Soundbox, or Paytm POS terminal linked to my bank account or Paytm Payments Bank wallet. Can I continue to accept payments using this setup after March 15, 2024?

Answer: No. If your setup is linked to Paytm Payments Bank, you will not be able to receive money into your account after March 15, 2024. You may receive a new QR code linked to another bank for continued services. You can also change your bank account details (where you receive settlements) through your service provider.

RBI has imposed a ban on Paytm Payments Bank, which is an auxiliary bank of the original company, One97 Communications Limited. Paytm Payments Bank offers services through the Paytm app. One97 Communications holds a 49% stake in Paytm Payments Bank.

Due to the ban imposed by the RBI, Paytm Payments Bank will cease its services after March 15, 2024, although many of its services are provided exclusively through this bank. In this situation, all services provided by Paytm Payments Bank will be discontinued after March 15, 2024, while other services will continue as before.

Paytm’s UPI service is exclusively provided through Paytm Payments Bank. Therefore, if there is no association with other banks, the UPI service will also be discontinued after March 15, 2024. Paytm has stated that it is in discussions with both NPCI and RBI regarding this matter.

Following RBI’s directive, after March 15, 2024, no Paytm customer can make any additional deposits or credit transactions, or top-ups into accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, and similar instruments. Partner banks can credit interest, cashback, sweep-in, or refunds at any time until the balance is available. However, no further banking services will be allowed by Paytm Payments Bank after March 15, 2024. The use of the balance will be permitted until then.

Apart from the services mentioned above, Paytm Payments Bank will not be allowed to offer any banking services after March 15, 2024. The UPI facility will also not be available after March 15. The nodal accounts of One97 Communications Limited and Paytm Payments Bank will be closed by February 29, 2024. Transactions and closure of nodal accounts will be completed by March 15, 2024. No further transactions will be permitted thereafter.