For "seamless" transactions to continue, Paytm selects a new banking partner

For "seamless" transactions to continue, Paytm selects a new banking partner

The Reserve Bank of India (RBI) issued an order in January directing Paytm Payments Bank to cease taking new deposits into its wallets and accounts as of February 29. On Friday, the RBI said that the deadline had been extended until March 15.

According to the firm, the Paytm QR code, Soundbox, and card machines will all function as they always have.

The parent business of Paytm Payments Bank has secured a new banking partner to sustain some of its well-liked products and weather the present crisis, while the central bank has extended the deadline for Paytm Payments Bank to go down.

The Reserve Bank of India (RBI) has directed Paytm Payments Bank, a unit of One97 Communications (OCL), in January to cease taking new deposits into its wallets and accounts as of February 29. Raised until March 15, the RBI said on Friday.

In order to maintain smooth merchant payments going forward, the firm (Paytm) moved its nodal account to Axis Bank by creating an escrow account, according to a statement from Paytm.

The business said that even after March 15, the Paytm QR code, Soundbox, and card terminals would all function as usual.

The RBI noted that Paytm Payments Bank has consistently broken the laws, which is why they took legal action against the bank. The Indian financial crime-fighting body started looking into the specifics of international transactions on the site earlier this week.

Giving consumers, especially dealers, "a little more time" to make other arrangements is the reason for the deadline extension, according to the RBI.

"No further deposit or credit transactions including top up will be enabled in any customer account, prepaid device, wallet, Fastag, National Standard Mobility Card, etc. after March 15, 2024," it said.

The RBI also released a comprehensive set of consumer explanations in separate releases.

Customers may take money out of their Paytm Payments Bank accounts and wallets until the available balance is depleted, according to the regulator, but they won't be able to add more after March 15.

Until the middle of March, customers who receive their paychecks or other transfers—such as government subsidies—into these accounts will need to find new arrangements.

If a merchant's QR codes are associated with accounts other than Paytm Payments Bank, they may keep accepting payments using Paytm's QR codes.

With a product known as FASTag, the bank is responsible for almost 25% of India's toll revenues. It is not possible to top up or recharge these FASTags after March 15, according to the RBI.

Vijay Shekhar Sharma, the chairman of the board of Paytm Payments Bank, has visited with RBI officials and the finance minister to advocate against the move; nevertheless, RBI Governor Shaktikanta Das said on Monday that the RBI would not be reviewing its decision.