When will Paytm shut down after February 29th? Nothing will function with UPI, Fastag, or wallets; learn the whole situation in ten questions and answers

When will Paytm shut down after February 29th? Nothing will function with UPI, Fastag, or wallets; learn the whole situation in ten questions and answers

Rahul, please take all of your money out of Paytm since it is about to shut. Many of its features will stop working after February 29, 2024. What? Yes, brother, you are correct. Because of anomalies discovered in Paytm Payment Bank, the RBI has prohibited its services.

Okay, Sonu, I swiftly took all of my money out of my Paytm wallet. Will the UPI service be discontinued as well? What will happen to my car's Fastag, too? Using Paytm, I have also made investments in gold and mutual funds. An FD is also present.

Rahul, allow me to take you to a financial advisor. The only person who can really respond to all of these inquiries is him.

Rahul Will UPI and the Paytm app cease to function as well?

Rahul, a financial expert To help you fully comprehend the situation, allow me to first tell you four facts about the organization.

One97 Communications Limited is Paytm's parent firm.

Additionally, Paytm Payment Bank Limited is one of its affiliate banks.

Services are accessible via Paytm Payment Bank on the Paytm app.

Paytm Payment Bank is 49% owned by One97 Communications.

Paytm Payment Bank has been subject to the RBI's suspension. Many of Paytm's services are only available via this bank. Under such circumstances, some services offered by Paytm Payments Bank would terminate on February 29, 2024, while other services will go on as usual.

Paytm Payment Bank is the sole way through which it offers its UPI service. Therefore, after February 29th, UPI service will likewise cease if there is no partnership with other banks. Paytm has said that it is talking about this with the RBI and the NPCI.

Rahul What will happen to the NCMC account, Fastag account, wallet, and savings account?

Expert in Finance: No limitations exist regarding the withdrawal or use of funds from savings accounts, current accounts, prepaid cards, Fastag, National Common Mobility Card, and other similar accounts. These may be used up till the available balance.

Rahul Are Paytm Money Stock Accounts and Paytm Mutual Fund Safe?

Expert in Finance: Through Paytm Money, Paytm provides its mutual fund and stock brokerage services. Paytm Money is a depository party and stock broker registered with SEBI.Paint is present. Services won't be entirely impacted as a result. Your services would be impacted if you utilize your Paytm Payment Bank account for both credit and debit transactions.

Rahul Is it safe to purchase gold using Paytm as well?

Expert in Finance: Investing in gold with MMTC-PAMP is 100% safe. Therefore, the RBI's move against Paytm Payment Bank won't have a total impact on this service. Your services would be impacted if you utilize your Paytm Payment Bank account for both credit and debit transactions.

Rahul What will happen to the loans, credit cards, and insurance that Paytm has taken?

Expert in Finance: Paytm offers credit cards via joint ventures with SBI and HDFC. In a similar vein, Paytm offers lending and insurance services via several banks and NBFCs. Paytm Payment Bank is not related to this at all.

Rahul Should I purchase Paytm shares now that they have dropped in value?

Expert in Finance: Rahul, you are correct; in only two days, Paytm's stock has dropped 40%. It fell to Rs 487 on Friday, hitting a lower circuit of 20%. It was also subjected to a lesser circuit earlier on Thursday. Purchasing these shares at this time would not be a wise move. Investors should avoid these stocks until this problem is clarified. SEBI has raised its circuit limit to 10% in light of the decrease in Paytm's stock.

Rahul Will the Soundbox, card machines, and Paytm QR close?

Expert in Finance: Paytm claims that business as usual would be maintained for its offline merchant payment network services, which include Paytm QR, Paytm Soundbox, and Paytm Card Machine.

Rahul What, after all, was Paytm Bank breaking?

Expert in Finance: Moneycontrol reports that the RBI discovered significant anomalies in Paytm's KYC, putting users at grave danger. Paytm did not do customer KYC for millions of users. Millions of accounts' PANs were not validated. A single PAN was serving many clients. The RBI was often provided with inaccurate information by the bank.

In a press statement dated January 31, 2024, the RBI said that on March 11, 2022, a notification was sent to Paytm Payment Bank Limited (PPBL). It was forbidden for the bank to take on new clients. A proposal to have an outside team do all of the audits was also discussed.

According to the press release, external auditors discovered many problems with Paytm Payment Bank's operation in the system audit report. It was discovered that the bank had broken RBI regulations as well. RBI made the decision to act strictly as a result. RBI made four statements:

There won't be any deposits made to the Paytm Payment Bank account after February 29. With this bank, money cannot be placed into wallets, prepaid services, Fastag, or other services. On the other hand, the account may get credit for interest, cashback, and refunds at any moment.

The usage and withdrawal of funds from clients' savings accounts, current accounts, prepaid cards, Fastag, National Common Mobility Card, and other accounts are unrestricted in any way. It is used up till the available balance.

After February 29, 2024, Paytm Payment Bank will be prohibited from offering any financial services, with the exception of those listed in the second item. After February 29, there won't be any UPI facilities available either.

By February 29, 2024, One97 Communications and Paytm Payments Services will terminate their nodal accounts. By March 15, 2024, all pending transactions and nodal account settlements will be finished. No further transactions will be permitted after that.

Rahul Paytm must have responded as well, so what was said in that response?

Financial Expert: According to Paytm CEO Vijay Shekhar Sharma, the platform is operational and will stay that way even after February 29. I applaud you on behalf of the whole Paytm team for your unwavering support. Every problem can have an answer.

As a payments provider, One 97 Communication said that it collaborates with several banks on various payment solutions. In addition to Paytm Payment Bank. Since the enactment of the limitations, the corporation has begun to collaborate with other banks.

The business will no longer collaborate with Paytm Payments Bank Limited and would solely deal with other banks going ahead. The business will enter the payment and financial services sectors in the next phase of its development, but it will only do so in collaboration with other banks.

Rahul After the RBI makes its verdict, what will happen to Paytm Bank—will it close?

Expert in Finance: The Paytm Payment Bank would face problems if the RBI-discovered anomalies are not fixed. It might also be possible for another bank to acquire it.