Paytm Payments Bank asked to stop onboarding of new customers with immediate effect

On Wednesday, the Reserve Bank of India directed Paytm Payments Bank to stop onboarding of new customers with immediate effect.
The above supervisory action was warranted by the banking regulator given the Comprehensive System Audit report and subsequent compliance validation report of the external auditors that revealed persistent non-compliance and continued material supervisory concerns in the bank,
Accordingly, PPBL is restricted to perform the following operations.

1. No further deposits 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, cashback, or refunds which may be credited anytime.
2. Withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. are to be permitted without any restrictions, up to their available balance.
3. No other banking services, other than those referred to above, 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.
4. The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd. are to be terminated at the earliest, in any case not later than February 29, 2024.
5. 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 above direction was exercised by RBI under section 35A of the Banking Regulation Act 1949.