RBI curbs on Paytm: Can’t take deposits, offer other services after February 29

The Reserve Bank of India (RBI) barred Paytm Payments Bank from accepting deposits or top-ups in any of its key products — customer accounts, prepaid instruments, wallets, FASTags and National Common Mobility Card (NCMC) among others — after February 29 in the wake of “persistent non-compliances and material supervisory concerns”.

The RBI decision essentially bars Paytm Payments Bank from offering all its core services — including accounts and wallets — from March, effectively crippling the company’s business. Given the significant customer base of Paytm — once the poster boy of India’s fintech revolution — this could impact a large number of customers.

Neither Paytm Payments Bank nor its parent company, One97 Communications, commented on the RBI action.

“No further deposits or credit transactions or top-ups should 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 said.