RBI's FAQs for Paytm customers: New deadline and other announcements
What's the story
The Reserve Bank of India (RBI) has published a set of frequently asked questions (FAQs) to address concerns about Paytm Payments Bank. RBI Governor Shaktikanta Das has assured that the FAQs would clarify the doubts of all the stakeholders. The biggest relief from RBI is the extension of the deadline to withdraw and deposit money. The new deadline is March 15 as against the earlier deadline of February 29.
Transactions not bound by deadline
Refunds, cashbacks, and sweep-ins permitted
In its FAQs, the RBI mentions that refunds, cashbacks, sweep-ins from partner banks, and interest can be credited to Paytm Payments Bank accounts even after March 15. Existing deposits with partner banks can be transferred back to Paytm Payments Bank accounts but with a limit of Rs. 2 lakhs per individual customer at the end of the day. All auto-debit transactions will continue to be paid through Paytm Payments Bank even after March 15 until there is no balance left.
Wallet details
Paytm wallet usage and closure options
After March 15, 2024, customers can still use, withdraw, or transfer money from their Paytm Payments Bank wallets. However, they won't be able to add or transfer money into the wallet or receive any credits other than cashbacks or refunds after this date. Wallets can be closed and balances transferred to another bank account. Merchants can accept payments using a Paytm QR code, soundbox or POS terminal if it is linked to another bank account (not with Paytm Payments Bank).
Transactions bound by deadline
Salary credits and government subsidies disallowed
After March 15, 2024, customers will no longer be able to deposit or withdraw money from their Paytm Payments Bank accounts. Customers will also not receive salary credits or government subsidies linked to their Paytm Payments Bank accounts after the deadline period. It is recommended that customers make alternative arrangements with another bank before this date to avoid any inconvenience or disruption. You can read the full 30 FAQ's published by the RBI here.
About the case
Paytm is facing RBI wrath due to KYC non-compliance
On January 31, after a prolonged engagement with Paytm to make the fintech firm comply with Know Your Customer (KYC) rules, the RBI banned the Paytm Payments Banks from conducting business after February 29. Today, the date got postponed to March 15. In its audit, RBI found that the same PAN card details were used for multiple accounts with hefty balances. This raised suspicions about alleged money laundering and foreign exchange violations. Presently, the Enforcement Directorate is investigating these suspicions.