Days after ordering Paytm Payments Bank to stop most transactions, the Reserve Bank of India (RBI) on Friday, 16 February, came out with a set of FAQs on what the move means for Paytm depositors, wallet holders, FASTag users, merchants and others.
Citing an audit that revealed "persistent non-compliances", the RBI announced a slew of curbs on the lending business of fintech giant Paytm on 31 January.
Paytm Payments Bank was directed to not accept fresh deposits, top-up customer accounts, or carry out credit transactions across its services from 29 February onwards. However, that deadline has now been extended to 15 March.
Soon after the RBI's order was issued, Paytm shares plummeted by 20% on the first day and hit the lower circuit the next day. Additionally, the regulator's actions against Paytm sparked concerns that it could severely disrupt other Paytm services as well, such as its payment gateway platform and merchant-side business.
So, what happens to the existing deposits of Paytm Payments Bank customers? Will refunds and cashbacks still be credited to Paytm accounts? And why has the deadline been changed? Here's what you need to know.
Can I withdraw or transfer money from my account with Paytm Payments Bank?
"Yes. You can continue to use, withdraw or transfer your funds from your account upto the available balance in your account," the RBI said.
Money can also be withdrawn or transferred from your Paytm account using your debit card or via UPI but only "upto the available balance in your account."
Auto debit mandates as part of your OTT subscription, EMI instalments, or electricity bill will also continue upto the available balance in your account.
Same goes for withdrawals through the Aadhaar-enabled Payment System (AePS) after biometric authentication.
What if I want to deposit more money in my account with Paytm Payments Bank?
"After March 15, 2024, you will not be able to deposit money into your account with Paytm Payments Bank," the central bank clarified.
Post the 15 March deadline, your salary, subsidy, or certain direct benefit transfers linked to your Aadhaar will not continue being credited to your Paytm Payments Bank account.
You also cannot transfer money into your account using UPI or IMPS.
"Please arrange to change your linked account to another bank before March 15, 2024 to avoid any inconvenience or disruption," RBI added.
What about refunds and cashbacks? Will they still be credited to my Paytm account?
"Yes. Refunds, cashbacks, sweep-in from partner banks or interest are permitted credits into your account even after March 15, 2024," the RBI said.
What will happen to my deposits maintained with partner banks through ‘sweep in/out’ arrangements after 15 March?
"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. ₹2 lakh per individual customer at the end of day)," the RBI said.
"However, no fresh deposits with partner banks through Paytm Payments Bank will be allowed after March 15, 2024," it added.
I have a wallet with Paytm Payments Bank. What do I need to know?
You can continue to use, withdraw, or transfer money from your wallet to another wallet or bank account upto the balance that you have.
However, you cannot top-up or transfer money into this wallet after 15 March unless the money is in the form of refunds or cashbacks that are due.
Additionally, minimum KYC wallets can only be used for merchant payments.
Can I close my Paytm wallet and have the balance transferred to another bank account?
"Yes. You may approach Paytm Payments Bank or use its banking app to close your wallet and transfer the balance to an account maintained with another bank in the case of full KYC wallets. In the case of minimum KYC Wallets, you may use the available balance or request for a refund," the RBI said.
I have a FASTag issued by Paytm Payments Bank. What do I need to know?
You can continue to use your FASTag to pay toll upto the available balance.
However, you cannot top-up the balance or recharge your FASTag after 15 March. You also cannot transfer the balance from your Paytm-issued FASTag to a new FASTag because it does not have "a credit balance transfer feature."
Hence, the only option is to close your Paytm-issued FASTag and request the bank for a refund.
"It is suggested that you procure a new FASTag issued by another bank before March 15, 2024 to avoid any inconvenience," the RBI added.
Can a vegetable vendor like me continue using a Paytm QR code, Paytm soundbox or a Paytm POS terminal that's linked to my Paytm wallet or Paytm Payments Bank account?
Not after 15 March.
"In order to avoid any inconvenience or disruption, it is suggested that [merchants] may obtain a fresh QR code linked to an account with another bank or wallet to receive payments," the RBI said.
"You may also change your bank account details (in which you receive payments) through your service provider," it added.
What if my Paytm Payments Bank account has been frozen or lien marked by 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," the central bank clarified.
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