“RBI affirms decision: No review of action against Paytm Payments Bank”

Reserve Bank of India Governor Shaktikanta Das on Monday ruled out any review of the central bank’s action against Paytm Payments Bank (PPBL), saying the decision was taken after a comprehensive assessment of the functioning of the lender.

In a major action against Paytm Payments Bank (PPBL), RBI, on January 31, directed it to stop accepting deposits or top-ups in any customer accounts, wallets, FASTTags and other instruments after February 29.

”At the moment let me say very clearly there is no review of this (PPBL) decision. If your are expecting a review of the decision, let me very clearly say there is (going to be) no review of the decision,” Das said at a press conference after the 606th meeting of the Central Board of Directors of the Reserve Bank of India.

The meeting was addressed by Finance Minister Nirmala Sitharaman.

The governor said any decision against entities regulated by the RBI is taken after a comprehensive assessment.

While emphasising that RBI is supportive of the fintech sector, Das said it is also committed to protect the interest of customers as well as ensure financial stability.

The central bank is expected to soon issue a set of FAQs (Frequently Asked Questions) on the Paytm matter this week.

While announcing the action against PPBL, the RBI had said the direction follows persistent non-compliances and continued material supervisory concerns.

Earlier on March 11, 2022, the RBI had barred PPBL from onboarding new customers with immediate effect.

In its latest action, RBI has asked the Paytm Payments Bank not to take deposits/ credit transactions/top-ups in any customer accounts, prepaid instruments, wallets, FASTags, and NCMC cards, among others after February 29, 2024.

However, the central bank has allowed credit of interest, cashbacks, or refunds even beyond February 29.

Further, withdrawal or utilisation of balances by PPBL customers from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, and National Common Mobility Cards are permitted without any restrictions, up to their available balance.

RBI also directed termination of the ‘nodal accounts’ of One97 Communications Ltd.

One97 Communications, which owns Paytm brand, holds a 49 per cent stake in Paytm Payments Bank Limited but classifies it as an associate of the company and not as a subsidiary.