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The Reserve Bank of India (RBI) has extended the earlier stipulated deadline (of February 29, 2024) for Paytm Payments Bank’s customers to make deposits and access credit transactions till March 15, 2024.
After the revised date no further deposits or credit transactions or top-ups would be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, other than any interest, cashbacks, sweep in from partner banks or refunds which may be credited anytime, the RBI said in a fresh circular issued on Friday.
There is no change in the date for withdrawal or utilisation of balances by its customers from their accounts that is February 29. No banking services, other than fund transfers, BBPOU and UPI facility would be provided by the bank after March 15, 2024. Withdrawal or utilisation of available balance by customers or wallet holders, such fund transfers including AEPS, IMPS and UPI would be allowed anytime, the RBI said.
Settlement of all pipeline transactions in nodal accounts in respect of all transactions initiated on or before February 29, 2024 must be completed by March 15, 2024 and no further transactions would be permitted thereafter, it added.
The RBI has directed the bank to facilitate withdrawals of available balance from all accounts and wallets, excluding the ones that are frozen or lien marked by Law Enforcement or judicial authorities.
“Further, it is directed that the bank shall facilitate a seamless withdrawal of customer deposits that are parked with partner banks under the automatic ‘sweep-in sweep-out’ facility without causing any inconvenience to such customers,” the RBI said in the circular.
For better understanding of the impact of its directive issued on January 29, 2024 on Payment Bank, the RBI on Friday issued FAQs which is placed on its website.
As per this, merchants, if their receipt and transfer of funds is linked to any bank account other than Paytm Payments Bank, can continue to use this arrangement even after March 15, 2024.
However, those merchants who are accepting payments using a Paytm QR code, Paytm soundbox, Paytm POS terminal linked to their bank account or wallet with Paytm Payments Bank will not be able to receive any credit into their Paytm Bank account or wallet after March 15, 2024 other than refunds, cashbacks, sweep-in from partner banks or interest.
“In order to avoid any inconvenience or disruption, it is suggested that you may obtain a fresh QR code linked to an account with another bank or wallet to receive payments. You may also change your bank account details (in which you receive payments) through your service provider,” the RBI said in the FAQ.
One 97 Communications Ltd., the parent of Paytm, in a statement said “Paytm QR, Soundbox, Card machine will continue to work as always ever beyond March 15, as confirmed by RBI” The company said it has shifted its nodal account to Axis Bank (by opening an Escrow account) to continue seamless merchant settlements as before.”
People can continue to use their FASTag to pay toll up to the available balance. However, no further funding or top-ups will be allowed in the FASTags issued by Paytm Payments Bank after March 15, 2024. “It is suggested that you procure a new FASTag issued by another bank before March 15, 2024 to avoid any inconvenience,” the RBI said.
For FASTag issued by Paytm Payments Bank, no one will be able to top-up or recharge after March 15, 2024.
Since credit balance transfer feature is not available in FASTag, customers will have to close the old FASTag issued by Paytm Payments Bank and request the bank for a refund.
Paytm Payments Bank customers can continue to use, withdraw or transfer funds from their account up to the available balance in their account even after March 15, 2024. Similarly, they can continue to use their debit card to withdraw or transfer funds up to the available balance in their account.
However, after March 15, 2024, no one will be able to deposit money into their account with Paytm Payments Bank. “No credits or deposits other than interest, cashbacks, sweep-in from partner banks or refunds are allowed to be credited,” the RBI said.
If someone is expecting a refund in her/his account with Paytm Payments Bank after March 15, 2024, it can be possible as refunds, cashbacks, sweep-in from partner banks or interest are permitted credits into the account even after March 15, 2024.
Similarly, the existing deposits of Paytm Payments Bank customers maintained with partner banks can be brought back (sweep-in) to the accounts with Paytm Payments Bank, subject to the ceiling on balance prescribed for a Payments Bank (i.e. ₹2 lakh per individual customer at the end of day).
“Such sweep-ins for the purpose of making available the balances for use or withdrawal by the customer will continue to be allowed. However, no fresh deposits with partner banks through Paytm Payments Bank will be allowed after March 15, 2024,” the RBI clarified.
Those whose salary is credited into their account with Paytm Payments Bank can not continue to receive their salary into this account after March 15, 2024. “It is suggested that you make alternative arrangements with another bank before March 15, 2024 to avoid inconvenience,” the RBI said in the FAQs. After March 15, 2024, no one will be able to receive any subsidy and certain direct benefit transfer credit into their account with Paytm Payments Bank.
As far as automatic bill payment is concerned, withdrawal/debit mandates (such as National Automated Clearing House (NACH) mandates) would continue to get executed till there is balance available in the account. However, after March 15, 2024, credit or deposit in the accounts will not be allowed. Therefore, to avoid inconvenience, it is suggested that one makes alternative arrangements through another bank, before March 15, 2024.
Those having a wallet with Paytm Payments Bank can continue to use, withdraw or transfer to another wallet or bank account up to the balance available in the wallet. Minimum KYC wallets can, however, be used only for merchant payments, the RBI said.
But after March 15, 2024 no one will be able to top-up or transfer money into the wallet or receive any credits, other than cashbacks, or refunds into this wallet. Refunds and cashbacks are allowed to be credited.
