Paytm QR codes, sound box and card machines will continue to work as before, the company said.
Paytm Payments Bank has been given more time by the central bank to wind down its operations, while its parent company has brought in a new banking partner to try to keep some of its popular products running and survive the current crisis.
The Reserve Bank of India (RBI) in January directed Paytm Payments Bank, an associate of One 97 Communications (OCL) – also known as Paytm, to stop accepting new deposits into its accounts or wallets from February 29. That deadline had been extended to March 15, the RBI said on Friday.
“The company (Paytm) has shifted its nodal account to Axis Bank (by opening an escrow account) to continue seamless merchant settlement as before,” Paytm said in a press release.
Paytm QR codes, sound box and card machines will continue to work as before even after March 15, the company added.
The action against Paytm Payments Bank was triggered by what RBI officials called persistent non-compliance with regulations. Earlier this week, India's Financial Crime Bureau began investigating the details of foreign transactions on the platform.
RBI said the deadline extension was aimed at giving customers, including traders, “some more time” to make alternative arrangements.
“After March 15, 2024, no further deposits, credit transactions or top-ups will be allowed on customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc.”
In addition, the RBI has also issued a detailed set of customer clarifications.
The regulator said customers can withdraw or use money from their Paytm Payments Bank accounts and wallets until such time as that money runs out, but they will not be able to add new money after March 15.
Customers who receive their salaries or other transfers, including government subsidies, into these accounts should make alternative arrangements by mid-March.
Merchants who use Paytm's QR codes to accept payments can continue to do so if these QR codes are linked to accounts other than Paytm Payments Bank.
The bank manages almost a fifth of India's tolls through a product called FASTag. The RBI said these FASTags cannot be recharged or topped up after March 15.
Non-executive chairman of Paytm Payments Bank Vijay Shekhar Sharma has met with RBI officials and the finance minister seeking to lobby against the crackdown, but RBI Governor Shaktikanta Das said on Monday there would be no review of his decision.
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