New Delhi : The Reserve Bank of India (RBI) is set to engage with officials from the National Highways Authority of India (NHAI) and the National Payments Corporation of India (NPCI) to iron out the transition process for merchants and consumers moving away from Paytm to alternative platforms.
This decision comes in the wake of RBI’s recent directive to Paytm Payments Bank, instructing the suspension of its major banking services due to regulatory deficiencies.
As per the RBI’s directive, Paytm Payments Bank will cease operations after February 29.
In a bid to facilitate a seamless transition and ensure uninterrupted digital transactions, RBI has called upon NHAI, overseeing the FASTag service, and NPCI, responsible for Unified Payment Interface (UPI) infrastructure, to engage with stakeholders.
Effective immediately, Paytm Payments Bank will no longer accept top-ups or deposits into customer accounts, including wallets and FASTags, post the specified date.
Notably, Paytm’s FASTag service, integral for highway toll payments, is closely linked to its wallet system.
This meeting is slated to occur before the RBI releases its Frequently Asked Questions (FAQs) regarding fintech operations next week.
The forthcoming FAQs, announced by the RBI on February 8, aim to address various inquiries concerning the operational aspects of Paytm and Paytm Payments Bank post-regulatory intervention.
RBI’s recent actions against Paytm Payments Bank stem from persistent non-compliance with regulatory standards.
Deputy Governor Swaminathan J. emphasised during a press conference that such supervisory actions follow extended periods of engagement and aim to safeguard consumer interests.
The punitive measures taken by RBI against Paytm primarily focus on the company’s failure to adhere to Know-Your-Customer (KYC) verification norms, an issue persisting despite previous penalties imposed by the central bank.
Governor Das underscored the importance of regulatory measures being proportionate to the gravity of the situation, with the overarching objective of maintaining systemic stability and protecting the interests of depositors and customers.
Paytm Payments Bank has been under RBI scrutiny since 2018, with concerns also raised regarding transactions exceeding permissible limits, heightening apprehensions related to money laundering.
