After penalising Paytm for not following guidelines and continued non-compliance, the Reserve Bank Of India ordered the fintech company to discontinue all the services provided by Paytm Payments Bank until February 29. In a recent development, RBI has granted an extension on the deadline for using Payments Bank services.
The Banking Apex has taken this initiative to avoid any inconvenience for the customers. RBI has also mentioned that the extension on the deadline is announced solely in the interest of merchants and customers who require more time to switch to other platforms and make alternative arrangements for using the prohibited services.
RBI Announcement Decoded
The central bank prohibited Paytm Payments Bank from taking new deposits or top-ups starting on February 29 on January 31, citing ongoing substantial supervisory concerns and continuous non-compliance by Paytm.
The Reserve Bank of India stated in clarifications released on Friday that users can still receive cashback and refunds in their Paytm Payments Bank accounts. But after March 15, they won’t be able to get their salaries, subsidies or direct benefit transfers linked to Aadhaar on their Paytm Payment’s Bank Account.
Services to Be Continued After March 15
RBI has ordered prohibition only on the services provided by Paytm Payments Bank. However, the QR codes, card machines and standard payments will continue working after March 15.
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