The Reserve Bank of India has granted Paytm Payments Bank a limited extension, pushing back the deadline for the bank to cease most of its banking operations from 29 February to 15 March 2024. The regulator framed the reprieve explicitly as being in the "larger public interest", giving customers and merchants additional time to transition their accounts and payment arrangements to alternative providers.
The RBI's 31 January action against Paytm Payments Bank prohibited new deposits and credit transactions after 29 February. The extension does not reverse or dilute the underlying restrictions.
MERCHANT DEVICES LINKED TO OTHER BANKS UNAFFECTED
The central bank was clear that QR code terminals, Paytm soundbox devices, and point-of-sale machines that are already linked to accounts held at other banks will remain fully functional and are not subject to the restrictions imposed on Paytm Payments Bank itself.
Customers with wallets or accounts directly held at Paytm Payments Bank face a different situation. They were advised to make alternative arrangements for credits such as salaries and for recurring payments before the revised deadline; withdrawal or use of existing balances remains permitted without restriction after it.
CORE PROHIBITION ON NEW DEPOSITS STANDS
Notwithstanding the extended timeline, the RBI said that the prohibition on Paytm Payments Bank accepting new deposits, credit transactions, or top-ups to wallets and FASTag accounts will take full effect after 15 March. The RBI has said its action stems from persistent non-compliances and continued material supervisory concerns identified in a comprehensive system audit and external auditors' compliance validation.
The March 15 deadline now stands as the firm endpoint of the extended compliance window, after which Paytm Payments Bank may no longer accept deposits, credits or top-ups, although customers can continue to withdraw or use their existing balances.