India central bank extends deadline for Paytm banking unit wind-down

INDIAN lender Paytm Payments Bank obtained a much-sought after extension from the central financial institution to wind down its operations on Friday (Feb 16), whilst its abroad transactions are underneath the scanner of the federal monetary crime preventing company.

The Reserve Bank of India (RBI) in a January order had requested Paytm Payments Bank, an affiliate of One 97 Communications or Paytm, to cease accepting any contemporary deposits in its account, or fashionable pockets, from Feb 29. The deadline is now prolonged to Mar 15, RBI stated.

The motion was triggered by persistent and severe supervisory considerations. Earlier this week, the nation’s crime preventing company started wanting into particulars of abroad transactions on the platform.

RBI stated the deadline extension was to permit prospects, together with retailers, “a little more time” to make various preparations.

“No further deposits or credit transactions or top ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc after Mar 15, 2024,” it stated.

Separately, the RBI additionally issued an in depth set of buyer clarifications.

The regulator stated prospects can withdraw or use funds from their Paytm Payments Bank accounts and wallets until the time these funds are exhausted however they can’t add any contemporary funds after Mar 15.

Customers who obtain their salaries or different transfers together with authorities subsidies into these accounts must make alternate preparations by mid-March.

Merchants utilizing Paytm’s QR codes for accepting funds can proceed to take action if these QR codes are linked to accounts apart from these held by Paytm Payments Bank.

The financial institution has almost a fifth share of India’s toll collections via a product referred to as FASTag. RBI stated these FASTags can’t be recharged or topped up after Mar 15.

Non-executive chairman of Paytm Payments Bank Vijay Shekhar Sharma has met with RBI officers and the finance minister in search of respite, however RBI governor Shaktikanta Das stated on Monday that there can be no overview of its choice. REUTERS