Paytm: The RBI placed limitations on Paytm Payments Bank Ltd (PPBL) on January 31, 2024, preventing it from taking new deposits and offering credit services starting on February 29. There is no expiration date set for the ability of current clients to withdraw their funds till their balances are depleted. The central bank made this decision subsequent to forbidding PPBL from accepting new clients in March 2022. An explanation of the impact on Paytm users can be found here:
Unraveling Concerns about PPBL
RBI raised concerns about PPBL because of related-party transactions, money laundering, holding more money than was permitted in a payment bank account, and non-compliance with know-your-customer (KYC) standards for accounts older than a year.
Investor Concerns Escalate
Clients of Paytm Money Ltd (PML) are worried about potential consequences for their platform-managed assets in mutual funds, stocks, and the National Pension System (NPS). MFs and other financial instruments can be purchased on the fintech platform PML. There won’t be any effect on how Paytm Money operates. The company has released a statement stating that you are able to carry on trading, redeeming, and investing through PML.
“But investors who have set PPBL as their default bank account for funds transfer while investing will need to change the same before February 29,” posted Paytm on X. PML will notify you of the bank account modification procedure. This also applies to systematic investment plans, or SIPs.
Guardians of Your Investments
The securities of your exchange-traded funds (ETFs), bonds, and stocks are all stored in your Central Depository Services Limited (CDSL) demat account, and only you have the authority to make changes to them.
In a similar vein, your mutual funds are held by mutual fund houses, which are asset management firms-managed trusts under the watchful eye of trustees. A mutual fund’s structure prevents anyone other than an investor from claiming the money. You can therefore keep making investments and redemptions through PML.
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