Paytm Payments Bank closure on March 15 will limit certain services. Learn more - Paytm Payments Bank closure (2024)

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Paytm Payments Bank closure Reasons for closure Impact on customers Service restrictions Payment methods affected

ET Online|

Mar 14, 2024, 02:01:04 PM IST

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Paytm Payments Bank closure

Paytm Payments Bank, mandated by the Reserve Bank of India, will cease operations such as accepting deposits and processing credit transactions from March 15 onward. This decision comes in response to serious rule violations, as outlined by the RBI on January 31. Investors who exclusively use the bank for stock trading have been provided guidelines by the Bombay Stock Exchange.

Reuters

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Reasons for closure

The closure of Paytm Payments Bank stems from directives issued by the RBI, citing "non-compliance issues and concerns" within the institution. Reports indicate that numerous accounts were opened without proper identification, raising suspicions of potential involvement in illicit activities such as money laundering. Authorities, including the ED and the Prime Minister's Office, have been informed of these findings. Revenue Secretary Sanjay Malhotra announced that the ED will investigate the bank, which is scheduled to temporarily close by March 15. The investigation uncovered multiple accounts linked to the same identification proof, with transactions involving substantial sums. Additionally, an unusually high number of dormant accounts were identified.

Reuters

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Impact on customers

Following the closure of Paytm Payments Bank, customers will be unable to deposit funds into their accounts but can still withdraw or transfer existing balances after March 15. While salary credits, direct benefit transfers, and subsidies will no longer be accessible in these accounts, refunds, cashbacks, and sweep-ins from partner banks will remain permissible.

Reuters

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Service restrictions

Customers will lose access to services like top-up or money transfers in their wallets after March 15, although payments can still be made if there is a balance in their accounts. Recharging or topping up funds in NCMC cards issued by Paytm bank will no longer be an option.

Reuters

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Payment methods affected

After March 15, customers will be unable to recharge their FASTag issued by Paytm Payments Bank. Furthermore, transfers into Paytm Payments Bank accounts through UPI or IMPS will be discontinued.

Reuters

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Paytm Payments Bank closure