RBI gives 15 days relaxation to Paytm Payments bank, says Paytm QR, soundbox to continue to work

Mumbai: The Reserve Bank of India on Friday gave a 15 day relaxation to Paytm payments bank on accepting deposits. The last date will now be March 15 from the earlier date of February 29.

In its release the Central Bank said "No further deposits credit transactions or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc. after March 15, 2024 (extended from the earlier stipulated timeline of February 29, 2024), other than any interest, cashback, sweep in from partner banks or refunds which may be credited anytime." the RBI said.
"Withdrawal or utilisation of balances by its customers from their accounts including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc. are to be permitted without any restrictions, upto their available balance (no change)" the Central Bank further added

"No banking services, other than those referred to in (ii) above, like fund transfers (irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facility should be provided by the bank after March 15, 2024 (extended from the earlier stipulated timeline of February 29, 2024). However, for (ii) above (viz. for withdrawal or utilisation of available balance by customers or wallet holders), such fund transfers including AEPS, IMPS and UPI may be allowed anytime" the RBI release said.

"The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd maintained by Paytm Payments Bank Limited are to be terminated at the earliest, in any case not later than February 29, 2024 (no change)" the release added.
"Settlement of all pipeline transactions in nodal accounts referred to in item (iv) above (in respect of all transactions initiated on or before February 29, 2024) shall be completed by March 15, 2024, and no further transactions shall be permitted thereafter (no change)" the RBI further said.

"It is also directed that withdrawals up to their available balance should be facilitated by the bank from all accounts and wallets, excluding the ones that are frozen or lien marked by Law Enforcement or judicial authorities," RBI added
"Further, it is directed that the bank shall facilitate a seamless withdrawal of customer deposits that are parked with partner banks under the automatic 'sweep-in sweep-out' facility without causing any inconvenience to such customers." the Central Bank directed.
The Central Bank also issues a set of FAQs, some of which stated:

1. Customers can continue to use, withdraw or transfer your funds from their account upto the available balance in the account.
Similarly, they can continue to use your debit card to withdraw or transfer funds upto the available balance in your account.
2. After March 15, 2024, customers will not be able to deposit money into your account with Paytm Payments Bank. No credits or deposits other than interest, cashbacks, sweep-in from partner banks or refunds are allowed to be credited.

3. Refunds, cashbacks, sweep-in from partner banks or interest are permitted credits into your account even after March 15, 2024.
4. The existing Deposits of Paytm Payments Bank customers maintained with partner banks can be brought back (sweep-in) to the accounts with Paytm Payments Bank, subject to the ceiling on balance prescribed for a Payments Bank (i.e. Rs2 lakh per individual customer at the end of day). Such sweep-ins for the purpose of making available the balances for use or withdrawal by the customer will continue to be allowed. However, no fresh deposits with partner banks through Paytm Payments Bank will be allowed after March 15, 2024.
5. After March 15, 2024, customers will not be able to receive any such credits into the account with Paytm Payments Bank.
6. Withdrawal/debit mandates (such as National Automated Clearing House (NACH) mandates) will continue to get executed till there is balance available in your account. However, after March 15, 2024, credit or deposit in the accounts will not be allowed.

7. Withdrawal/debit mandates through automatic UPI mandates will continue to get executed till there is balance available in your account. However, after March 15, 2024, credit or deposit in the accounts will not be allowed.
8. Customers can continue to use, withdraw or transfer to another wallet or bank account upto the balance available in the wallet. Minimum KYC wallets can however, be used only for merchant payments.

9. Customers can continue to use their FASTag to pay toll upto the available balance. However, no further funding or top ups will be allowed in the FASTags issued by Paytm Payments Bank after March 15, 2024.
10. Merchants using Paytm Payments Bank to receive payments using a Paytm QR code, Paytm soundbox or Paytm POS terminal, linked to another bank account can continue to use this set-up even after March 15, 2024 if their receipt and transfer of funds is linked to any bank account other than Paytm Payments Bank.

11. Merchants accepting payments using a Paytm QR code, Paytm soundbox, Paytm POS terminal linked to a bank account or wallet with Paytm Payments Bank, cannot continue to use this set-up even after March 15, 2024 and will not be able to receive any credit into their bank account or wallet with Paytm Payments Bank other than refunds, cashbacks, sweep-in from partner banks or interest.

12. After March 15, 2024 customers will not be able to receive any credit into their bank account or wallet with Paytm Payments Bank other than refunds, cashbacks, sweep-in from partner banks or interest. In order to avoid any inconvenience or disruption, it is suggested that customers may obtain a fresh QR code linked to an account with another bank or wallet to receive payments.

In response the FAQs issued Paytm founder Vijay Shekhar Sharma said in a post on X "Paytm QR, Soundbox and EDC (card machine) will continue to work like always, even after March 15. The latest FAQ issued by RBI on point #21 clarifies it unambiguously. Do not fall for any rumour or let anyone deter you to championing Digital India."