Paytm Payments Bank: Will you be able to use Paytm for UPI after RBI action? Know all details
Paytm Payments Bank, established in 2015, operates as a specialised banking entity and has been a pivotal partner for Paytm, holding all 330 million wallet accounts. Here are some key details about Paytm Payments Bank and the implications of the RBI's recent actions:
![Paytm Payments Bank: Will you be able to use Paytm for UPI after RBI action? Know all details](https://cdn.zeebiz.com/sites/default/files/2024/02/02/278935-paytm-1.jpg?im=FitAndFill=(1200,900))
Paytm Payments Bank: The RBI has ordered the payments bank subsidiary of Paytm to halt the acceptance of fresh deposits in its accounts and popular wallets from March onwards. This move has sparked concerns about the future usability of Paytm's UPI services.
Paytm Payments Bank, established in 2015, operates as a specialised banking entity and has been a pivotal partner for Paytm, holding all 330 million wallet accounts.
Here are some key details about Paytm Payments Bank and the implications of the RBI's recent actions:
Ownership Structure:
Paytm Payments Bank is 49% owned by Paytm (One 97 Communications), with the remaining 51% held by Paytm's Chief Executive and founder, Vijay Shekhar Sharma.
Deposit Limits and Restrictions:
The payments bank is permitted to accept small deposits up to Rs 200,000 ($2,400) but is prohibited from lending. Deposits must be parked in government securities or other bank deposits.
Paytm Wallets and UPI Transactions:
If you have linked your Paytm Payments Bank account to your Paytm, UPI transactions will not be possible. However, linking another bank account allows users to continue making UPI payments.
Concerns and Questions for Paytm Users:
Recent RBI actions have made Paytm users uncertain about the fate of their accounts and services. Questions about the app's potential closure, the fate of money in their Paytm wallets, and the ability to make UPI payments are lingering concerns.
Impact on Transactions:
After February 29, Paytm users will not be able to conduct any transactions in their Paytm Payments Bank accounts. Shopkeepers relying on Paytm Payments Bank will no longer receive payments after the specified date.
Sub-Wallets and Services:
While existing funds in sub-wallets related to food and fuel can still be used, adding new funds will no longer be possible.
Withdrawal and Usage of Wallet Funds:
Before February 29, users are advised to either spend money in their Paytm wallets or transfer it to another wallet or bank account. After this date, wallet funds can be used to pay electricity and telephone bills.
RBI's Rationale:
The RBI has taken action against Paytm for non-compliance with rules, resulting in a ban on adding new customers and restrictions on new deposits and top-ups from March 1. However, there are no restrictions on the withdrawal of money for existing customers, and funds in wallets, FASTags, and mobility cards can still be utilised.
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