Despite the RBI’s directive to curtail operations on Paytm Payments Bank (PPBL), the company appears to be in serious trouble. The road highway toll authority appears to have taken Paytm Payments Bank off the list of approved banks that are permitted to issue new FASTags, which is significant news for Paytm FASTag users.
The road highway toll authority has suggested that customers obtain FASTags from designated banks only—a list of 32 banks has been provided—but Paytm Payments Bank has not been included in this list. This implies that fresh RFID stickers will now need to be obtained for more than 20 million Paytm FASTag customers.
A few days prior, the Reserve Bank of India gave Paytm Payments Bank (PPBL) an important mandate instructing the lender to stop accepting deposits or top-ups in any user accounts, wallets, FASTTags, and other devices after February 29. However, customers can ask for interest, cashback, or a refund at any moment.
The instruction was issued in response to persistent, substantial supervisory concerns and persistent non-compliance, as stated in a central bank statement. On March 11, 2022, the RBI swiftly forbade PPBL from taking on new customers. The Paytm group firm PPBL, meanwhile, said nothing in response to the RBI’s order against the bank.
“No further deposits or 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, cashbacks, or refunds which may be credited anytime,” the RBI stated. Furthermore, as long as they have the funds available, its users are permitted to withdraw or utilise the balances from any of their accounts, including savings bank accounts, current accounts, prepaid cards, FASTags, and National Common Mobility Cards.
After February 29, 2024, the bank should only offer the aforementioned banking services: fund transfers (regardless of the name or type of service, such as AEPS, IMPS, etc.), BBPOU, and UPI facilities,” the statement continued.
The RBI further mandated that the “nodal accounts” of One97 Communications Ltd. and Paytm Payments Services be closed as soon as feasible and, in any case, no later than February 29, 2024.
One97 Communications, the company that owns the Paytm brand, views Paytm Payments Bank Limited as an associate rather than a subsidiary, even though it holds a 49% stake in the latter.
The RBI states that by March 15, 2024, all pipeline transactions and nodal accounts (relating to all transactions initiated on or before February 29, 2024) must be cleared; after that, no further transactions would be permitted.
