Paytm Payments Bank: What do the RBI curbs mean for users?

Paytm Payments Bank: What do the RBI curbs mean for users?

Addressing concerns around the curbs imposed on Paytm Payments Bank, the Reserve Bank of India issued an FAQ (Frequently Asked Questions) detailing what will be the future of the bank, how can customers and merchants utilise or withdraw their funds, and what will be allowed post March 15. Businessline breaks it down:

  • What happens to ac- counts with Paytm Payments Bank post March 15?
    Funds can be with- drawn or transferred from savings or current accounts. Debit card, UPI mandates, loan EMIs and auto-debit payments will also be al- lowed till balance is avail- able. However, account holders will not be permitted to deposit money into the ac- count, including salaries, fund transfers or subsidies. Only interest, cashbacks, sweep-in from partner banks, or refunds may be credited.
  • What happens to de- posits maintained with partner banks through ‘sweep in/out’ arrangements?
    Deposits of maintained with partner banks can be brought back (sweep-in) to Paytm Payments Bank, subject to the ₹2 lakh ceiling for payments banks. No fresh deposits with partner banks will be allowed, but the ac- count balance post “sweep- in” may be utilised or with- drawn at any time.
  • Will auto debits and loan EMIs linked to banks other than Paytm continue?
    Yes, EMIs and mandates registered with any bank, other than Paytm Payments Bank, can continue post March 15.
  • Can money in the Paytm wallet be used after March 15?
    Wallet holders can continue to use, withdraw or transfer to another wallet or bank account up to the balance available. Minimum KYC wallets can, however, only be used for merchant payments. No top-up, money transfer or credit, other than cashbacks or refunds, will be allowed.
  • Can customers transfer their accounts to other banks?
    Customers can approach Paytm Payments Bank or use its banking app to close their wallet and transfer the balance to an account with an- other bank in the case of full KYC wallets. For minimum KYC wallets, available balance may be used or a refund requested.
  • What happens to Paytm FASTag and NCMC cards?
    FASTags and NCMC cards issued by Paytm Payments Bank can be used to make payments up to the available balance, or closed and refunded. No incremental funding, recharge or top up will be allowed post March 15. Customers will need to get a new FASTag or NCMC card issued by another bank or non-bank pre-paid instrument (PPI) issuer.
  • Can merchants continue to receive payments in their Paytm Payments Bank account?
    Merchants can receive and transfer funds using a Paytm QR code, sound-box or POS terminal even after March 15, only for facilities linked to a bank account other than Paytm Payments Bank.
  • Will UPI, BBPS and AePS payments continue?
    Paytm Payments Bank ac- count payments through Bharat Bill Payment System (BBPS) and Aadhar enabled Payment System (AePS) authentication are allowed up to the balance available. Money can also be with- drawn from the account through UPI, IMPS or with the help of a business correspondent till March 15.
  • What about Paytm Payments Bank account/wallet under lien or freeze by Law Enforcement or judicial authorities?
    Any lien or freeze (full or partial) marked as per the instructions of any law enforcement or judicial authorities on the account/wallet of a customer with Paytm Payments Bank will continue to be governed by the orders passed by such authorities. In cases of freeze due to internal policies of Paytm Payments Bank, the bank will be liable to allow withdrawal or transfer of balance.


Courtesy: Business Line Dt.: 17th Feb. 2024

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