NEW DELHI: What exactly led the Reserve Bank of India (RBI) to take action against Paytm Payments Bank was the fact that there were several accounts created on its platform without proper identification.
According to reports, more than 1,000 users were said to have linked the same PAN to their accounts and compliance issues were also inconsistent, which led to curbs imposed on Paytm Payments Bank by the Central bank. The Comprehensive System Audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliance and continued material supervisory concerns in the bank, warranting further supervisory action, the RBI had said while imposing restrictions on it.
Finance Ministry sources have indicated that if any illegal activity is found, the Enforcement Directorate (ED) will probe Paytm Payments Bank. A basic question being asked by lakhs of Paytm users across the country is whether they will be able to use the digital platform after February 29, which is the deadline fixed by the RBI on Paytm Payments Bank. After February 29, Paytm wallet balances can still be topped up and money can be transferred. However, this would no longer be done through Paytm Payments Bank.
Users will be able to add funds through other financial institutions and use their existing balances for bill payments. This is so because the RBI has barred Paytm Payments Bank Limited, an associate of One 97 Communications Limited, from taking further deposits or undertaking credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags, or National Common Mobility Cards, after February 29.
However, it will be allowed to credit interest, cashbacks, or refunds into these accounts at any time, and customers are also free to withdraw or use balance in these accounts without restrictions. Paytm FASTag, which is connected to the Paytm wallet, will continue to function. Users with UPI addresses linked to other banks though can continue transactions beyond February 29 as usual.