Late last month, the Reserve Bank of India (RBI) issued a notification regarding the ban on accepting deposits or top-ups to the Paytm Payments Bank.
RBI
banned the services due to “persistent non-compliance and continued material supervisory concerns in the bank” under Section 35A of the Banking Regulation Act, 1949. So wondering what happens to your money in Paytm Payments Bank after March 15, the new deadline? Here are some important things you need to know.
What should account holders with money in Paytm Payments Bank do?
As an individual customer, you have several options:
- Keep your money with the bank until you need it.
- Withdraw the funds and deposit them into another bank account.
How can you transfer money in Paytm Payments Bank?
If you are a Paytm Payments Bank customer with money in your account, you can transfer it to another bank account through options like UPI (Unified Payments Interface), IMPS (Immediate Payment Service), or RTGS (Real-time Gross Settlement).
However, you won’t be able to add money to your Paytm account.
How can I transfer money in my Paytm Wallet?
If you have money in your Paytm Wallet, then, you can also transfer the same to a bank account. However, there is a limit of Rs 25,000 per transaction. Also, users can only transfer up to Rs 1,00,000 a day from Paytm Wallet to a bank account. Also, note that this will attract a transaction fee of 3 per cent while sending money to other bank accounts.
What happens to your money in Paytm Payments Bank after March 15 deadline?
Existing customers of Paytm Payments Bank can continue to withdraw and use their funds in various accounts (savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc.) until their available balance is exhausted. The Reserve Bank of India (RBI) permits withdrawal or utilization without any restrictions.
Additionally, pipeline transactions and nodal accounts initiated on or before March 15, 2024, will be settled by March 15, 2024. After March 14, no such transactions will be allowed.
How safe is your money in PPBL safe in the Paytm Payments Bank account?
Yes, your money is entirely safe in your Paytm Payments Bank account. Two reasons for this are:
* Deposit Insurance: The Deposit Insurance and Credit Guarantee Corporation (DICGC), functioning under the RBI, provides deposit insurance. This insurance acts as a protective cover for deposit holders in case the bank fails to pay its depositors.
* Investment Regulations: Payments banks, including Paytm Payments Bank, are required to fully invest their daily deposit balances. Specifically, 75% of the balances are invested in government securities (G-Secs), and the remaining 25% in commercial bank balances. This ensures that customer balances are handled smoothly as per RBI guidelines.
What will not be permitted after March 15
After February 29, 2024, no more deposits, credit transactions, top-ups, or withdrawals will be permitted in any customer accounts, prepaid cards, wallets, FASTags, NCMC cards, etc.
According to the RBI circular dated January 30, 2024, “No other banking services, other than those referred in above, like fund transfers (irrespective of name and nature of services like AEPS, IMPS, etc.), BBPOU and UPI facility should be provided by the bank after February 29, 2024.”
