The Reserve Bank of India (RBI) imposes restrictions on Paytm Payments Bank Ltd (PPBL) based on a system audit report and compliance validation by external auditors.
Regulatory Action
PPBL faces restrictions on deposits, top-ups, and various banking services under Section 35A of the Banking Regulation Act, 1949.
Specific Restrictions
PPBL is prohibited from accepting deposits, conducting credit transactions, or providing banking services after February 29, 2024.
Nodal Accounts
The Nodal Accounts of One97 Communications and Paytm Payments Services Ltd. are to be terminated by February 29, 2024.
Customer Access
Withdrawals or utilisation of balances by PPBL customers are permitted without restrictions up to their available balance.
Timeline for Transactions
Settlement of pipeline transactions and nodal accounts initiated on or before February 29, 2024, must be completed by March 15, 2024.
Previous Directive
RBI had earlier directed PPBL in March 2022 to stop onboarding new customers.
Industry Reaction
Gaurav Goel from Fynocrat Technologies comments on the RBI’s actions and its potential impact on Paytm Payments Bank.
Multiple Choice Questions (MCQs) with Answers:
1. Why did the RBI impose restrictions on Paytm Payments Bank Ltd (PPBL)?
a. Financial crisis
b. Persistent non-compliance and supervisory concerns
c. Technological issues
d. Customer complaints
Answer: b. Persistent non-compliance and supervisory concerns
2. What specific restrictions does PPBL face under Section 35A of the Banking Regulation Act, 1949?
a. Barred from digital payments
b. Prohibited from issuing credit cards
c. Cannot accept deposits or conduct credit transactions after February 29, 2024
d. Limited to a certain geographical area
Answer: c. Cannot accept deposits or conduct credit transactions after February 29, 2024
3. What is the deadline for terminating the Nodal Accounts of One97 Communications and Paytm Payments Services Ltd.?
a. February 15, 2024
b. February 29, 2024
c. March 1, 2024
d. March 15, 2024
Answer: b. February 29, 2024
4. What banking services are customers still allowed to use after February 29, 2024?
a. Fund transfers
b. Credit transactions
c. Top-ups in any customer account
d. FASTags
Answer: d. FASTags
5. According to Gaurav Goel, what impact might the RBI’s actions have on Paytm Payments Bank?
a. Positive impact
b. No impact
c. Negative impact
d. Undetermined impact
Answer: c. Negative impact