HT Digital,
New Delhi, Jan 31: The Reserve Bank of India (RBI) has instructed Paytm Payments Bank Ltd (PPBL) to immediately halt the onboarding of new customers. This directive comes under the purview of section 35A of the Banking Regulation Act, 1949.
The action was triggered by a Comprehensive System Audit report and subsequent compliance validation report by external auditors. These reports highlighted persistent non-compliances and ongoing significant supervisory concerns with the bank, necessitating further supervisory action.
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The RBI has issued the following directives to PPBL: No further deposits or credit transactions are to be allowed in any customer accounts after February 29, 2024. Customers can withdraw or use their account balances without any restrictions. The bank is prohibited from providing any other banking services after February 29, 2024.
The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd must be terminated by February 29, 2024. All pending transactions and nodal accounts must be settled by March 15, 2024.
In reaction to this, Jairam Ramesh, Member of Parliament and General Secretary in-charge Communications, Indian National Congress, criticised the current government’s handling of the banking sector. He mentioned that the decision will adversely affect ordinary Indians the most.
