Is Paytm Payments Bank Limited (PPBL) Banned in India? What Will Happen to Paytm FASTag, Wallet & UPI?

On January 31 2024, the Reserve Bank of India (RBI) barred Paytm Payments Bank Limited (PPBL) from accepting deposits or top-ups in any customer account, prepaid instruments, wallets, FASTags and NCMC card after February 29, 2024,  due to ongoing non-compliance and material supervisory concerns. On February 16, RBI extended the deadline for Paytm Payments Bank Limited (PPBL) to March 15 2024.

People still need clarification about what they should do with their Paytm Wallet, Paytm Fastag, Paytm Soundbox, Paytm UPI and Paytm Payments Bank Account. Here, we will answer most people's queries about the RBI and Paytm saga. 

RBI restriction on Paytm Payments Bank?

RBi barred Paytm Payments Bank from onboarding new customers and accepting deposits/ credits or top-ups in any customer account, prepaid instruments, wallets, FASTags and National Common Mobility (NCMC) card. 

Latest Update on Paytm Payments Bank

On February 16 2024, RBI extended Paytm Payments Bank's deadline. Deposits/ Credit transactions or top-ups will not be allowed in any Paytm payments bank customer accounts, prepaid instruments, wallets, FASTags, and National Common Mobility Cards after March 15, 2024, except for credit of any interest, cashback, and refunds. Additionally, banking services such as fund transfers, AEPS, IMPS, and UPI facilities will be restricted after March 15, 2024. But as announced before, the utilisation of the available balances in accounts and withdrawals can be done by customers even after the given deadline. 

Paytm Payments Bank Accounts Closed?

Paytm Payments Bank Account Holders can not use it after March 15, 2024. Deposit and credit services will be suspended. Available balance in Paytm Payments Bank account can be used, withdrawn and transferred by account holders until it is exhausted, even after the March deadline. 

Refund & Cashback 

If a refund or cashback comes into your Paytm Payments Bank Account post-March 15, 2024, it will be credited. 

Sweep-in facility

Suppose you have a sweep-in facility through Paytm Payments Bank Account to maintain balance in other partner bank accounts. In that case, the deposits can be brought back to the Paytm Payments Bank Account using sweep-in, irrespective of the March 15, 2024, deadline. Since it is a Payment Bank account, the transaction limitation would be Rs. 2 lakh per customer at the end of the day. Then, the customer can withdraw the amount.  

Direct Benefit Transfer and Subsidy

After March 25, 2024, Account holders of Paytm Payments Bank will not be able to receive any amount as a Direct Benefit Transfer and subsidy from the Government. To save yourself from the trouble, change the linked bank account for these subsidies. 

Bill Payment  

Mandates Bill payments like electricity bills, OTT subscription fees, etc will continuously be debited till there is a balance in your Paytm Payments Bank Account. But Deposit and credit services will not be allowed after March 15, 2024. 

What will happen to Paytm Wallet?

If you have a wallet with Paytm Payments Bank, then you can continuously use it to withdraw money from your wallet and transfer it to another wallet and bank account until the balance is available in your wallet. But no further top-ups, credit transactions and money transfers will be allowed post-15 March 2024. Only cashback and refunds will be allowed. But in the case of a minimum KYC wallet, you can only use the available balance for merchant payments or request Paytm Payments Bank for a refund

Will Paytm UPI Work? 

You can use the Paytm UPI until 15 March 2024 for mandate transactions like bill payments, OTT subscriptions, etc. Post-deadline, you can use the UPI/ IMPS online to withdraw the money from your wallet or Paytm Payments Bank account. 

Will Paytm FASTag Stop?

Paytm FASTag users can use their FASTags up to their available balance. No Further recharges or top-ups will be allowed after 15 March 2024. Users can not transfer the available balance in the FASTag issued by Paytm Payments Bank. They can only use the Available Balance in the FASTag or Close the FASTag and request a refund from Paytm Payments Bank. 

Will Paytm Payments Bank for Business stop working?

If you are a merchant using Paytm QR Code, Paytm soundbox and Paytm POS machine for the payments, you can continuously use this set-up even after March 15 2024, by linking this to another bank’s account or Digital wallet. Post deadline,  you will not be able to receive any credit into your Paytm Payments Bank Accounts or wallet other than refunds, cashback, sweep-in from partner banks or interest. 

Can I use NCMC Cards issued by Paytm Payment Bank?

National Common Mobility Cards issued by the Paytm Payments Bank can be used by cardholders until they exhaust the available balance on their cards. After March 15, 2024, Card users can not load or top up funds into the card. PPBL NCMC card users can not transfer the existing balance to another card. They can only use the balance until it is available or request the Paytm Payments Bank for a refund. 

Loans on Paytm Payments Bank Account?

Emi’s of the loans that have been taken through the Paytm Payments Bank account can continuously be debited from the same account until there is enough balance. However, after 15 March 2024, deposit and credit services will not be available for the Paytm Payments Bank accounts. So, to avoid inconvenience, borrowers can link some other bank’s account with their loan for EMI payment. 

Can i use Paytm Payments Bank as my salary account?

If you currently receive your salary in your Paytm Payments Bank Account, it is recommended that you make alternative arrangements to receive your salary in another bank account. This is because after March 15, 2025, no deposits or credits will be allowed in Paytm Payments Bank accounts.

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