Business Standard

RBI extends deadline for Paytm PB curbs to Mar 15

Merchants can accept payment if account linked to other banks

- MANOJIT SAHA & AJINKYA KAWALE

The Reserve Bank of India (RBI) on Monday extended the deadline for restrictio­ns on deposit and credit transactio­ns of Paytm Payments Bank Limited (PPBL) to March 15, stating that customers and merchants might require “a little more time to make alternativ­e arrangemen­ts”.

The earlier deadline was February 29.

Releasing a list of Frequently Asked Questions (FAQS), the regulator has clarified that merchants can accept payments using Paytm QR code, soundbox or point of sale (POS) terminal even after March 15, if the receipt or transfer of funds are linked to any banks other than PPBL. Merchants, however, cannot transact after March 15 if the QR code, POS, and sound box are linked to PPBL.

It was also clarified that PPBL couldnot offer any banking services, including unified payments interface (UPI) facility after March 15 — the deadline of which was February 29 earlier. No money transfers into PPBL accounts via UPI is not allowed after March 15.

The nodal accounts of One97 Communicat­ions Ltd and Paytm Payments Services Ltd maintained by PPBL are to be terminated at the earliest, in any case not later than February 29, 2024, the RBI said. There was no extension for settlement of pipeline transactio­ns and nodal accounts, which needs to be completed by March 15, 2024.

“It is also directed that withdrawal­s up to their available balance should be facilitate­d by the bank from all accounts and wallets, excluding the ones that are frozen or lien marked by law enforcemen­t or judicial authoritie­s,” the RBI said. All such accounts will continue to be governed by orders passed by respective authoritie­s.

Furthermor­e, the RBI said PPBL should facilitate a seamless withdrawal of customer deposits that are parked with partner banks under the automatic ‘sweep-in sweep-out’ facility without causing any inconvenie­nce to such customers.

In the FAQS, the regulator said refunds, cashbacks, and sweep-in from partner banks would be continued in PPBL accounts post March 15.

The RBI also clarified that the existing deposits of PPBL customers maintained with partner banks can be brought back (sweepin) to the accounts with PPBL, subject to the ceiling on balance prescribed for a payments bank, which is ~2 lakh per individual customer at the end of day.

“Such sweep-ins for the purpose of making available the balances for use or withdrawal by the customer will continue to be allowed. However, no fresh deposits with partner banks through PPBL will be allowed after March 15,

2024,” the FAQ said.

It was also clarified that no salaries can be credited or direct benefit transfer can be received after March 15. The regulator has asked PPBL customers to make alternativ­e arrangemen­ts with another bank before March 15 to avoid inconvenie­nce.

It was also clarified that top-up recharge of PPBL FASTAGS cannot be done post March 15, while it can be used up to the balance available. However, the credit balance transfer facility is not available and the customer needs to ask PPBL for a refund. The same is applicable for the National Common Mobility Card issued by PPBL.

“Credit balance transfer feature is not available in the FASTAG product. Therefore, you will have to close your old FASTAG issued by PPBL and request the bank for a refund,” the RBI said.

For bill payments, equated monthly instalment­s, and OTT subscripti­ons, the RBI has asked customers to make alternate arrangemen­ts before March 15.

Similarly, for Paytm wallets, while deposits withdrawn or transferre­d to another account up the balance available in the wallet post March 15. “Minimum know your customer wallets can, however, be used only for merchant payments,” the RBI said. Transferri­ng funds into the wallet or topups will not be allowed after March 15, while refunds and cashbacks will be allowed.

The RBI has also clarified that PPBL cannot on board any new customers, in continuati­on of the direction that was issued in March 2022.

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