The RBI placed limitations on Paytm Payments Bank Ltd (PPBL) on January 31, 2024, preventing it from taking new deposits and offering credit services starting on February 29. There is no expiration date set for the ability of current clients to withdraw their funds till their balances are depleted.
The central bank made this decision subsequent to forbidding PPBL from accepting new clients in March 2022.
An explanation of the impact on Paytm customers may be found here:
How did this come about?
RBI raised concerns about PPBL because of related-party transactions, money laundering, holding more money than was permitted in a payment bank account, and non-compliance with know-your-customer (KYC) standards for accounts older than a year.
Will the actions of the RBI affect the investments I made with Paytm Money?
Clients of Paytm Money Ltd (PML) are worried about potential consequences for their platform-managed assets in mutual funds, stocks, and the National Pension System (NPS). MFs and other financial instruments may be purchased on the fintech platform PML.
The way Paytm Money operates won’t be impacted. The company has released a statement stating that you are able to carry on trading, redeeming, and investing through PML. “However, before February 29th, investors who have designated PPBL as their default bank account for money transfers while investing must make the necessary changes,” Paytm wrote on X. PML will notify you of the bank account modification procedure. This is valid for SIPs as well.
Can I still access my gold assets and purchase and sell digital gold using the Paytm app?
Yes, you can still use the Paytm app to purchase and trade digital gold. “This is unrelated to the latest PPBL guidelines from the RBI. With MMTC-PAMP, gold investments made through the Paytm app are secure and safeguarded,” Paytm has said on X. You may still invest in and redeem digital gold since it is kept in MMTC-PAMP’s safe, insured vault.
When will my FASTag stop working after February 29?
No. You can keep using the balance that is now on your Paytm FASTag. “Over the past two years, PBBL has begun collaborating with other banks, and we will now step up our efforts.” “Other banks already distribute products like FASTags,” stated Bhavesh Gupta, President and COO of Paytm, at the press briefing. The amount on your FASTag can be increased from your partner bank account. IDFC First Bank, ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and other banks are among those that are providing the FASTag on the Paytm app.
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