Paytm Payments Bank Ltd (PPBL) was subject to further limitations on Wednesday by the Reserve Bank of India due to "persistent non-compliances" as reported by external auditors.  With Immediate effect, PPBL ceased onboarding new clients in March 2022.

The RBI prohibited PBBL from accepting new deposits and credit transactions for all of its services on Wednesday. The central bank issued a statement stating that an audit study had found "persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action.

After February 29, Paytm Payments Bank will not be able to accept any more deposits into any client accounts, according to the RBI.

It further stated that credit transactions - including those made using wallets—will not be permitted. The central bank stated that consumers will be able to use or withdraw their money without any limitations.

The Reserve Bank of India, acting in accordance with section 35A of the Banking Regulation Act, 1949 and all other authorities that it is authorized to use for this purpose, instructed PPBL on Wednesday to:

After February 29, 2024, there will be no more credit transactions, deposits, or top-ups permitted in any customer accounts, prepaid cards, wallets, FASTags, NCMC cards, etc., with the exception of interest, cashbacks, or refunds that may be credited at any point. Up to their available balance, customers may withdraw or use balances from any of their accounts, including savings bank accounts, current accounts, prepaid cards, FASTags, National Common Mobility Cards, etc., without any limitations."

After February 29, 2024, the bank should not offer any further financial services, including fund transfers (regardless of the name and type of service, such as AEPS, IMPS, etc.), BBPOUs, or UPI facilities.

One97 Communications Ltd. and Paytm Payments Services Ltd.'s Nodal Accounts must be closed as soon as possible, but in any event, no later than February 29, 2024. No more transactions will be allowed after March 15, 2024, when all pipeline transactions and nodal accounts (pertaining to all transactions started on or before February 29, 2024) have been settled.

ALSO READ: Private Banks Show Aggressive Growth in Personal Loan Portfolios