paytm rbi order: RBI bars Paytm from offering banking services effective February 29

The Reserve Bank of India has initiated a major disciplinary action against listed fintech major Paytm by effectively barring it from offering all forms of banking services to its customers within a month.
In a notification issued on Wednesday, the RBI has barred Paytm from offering all basic payment services, including Unified Payments Interface, IMPS, Aadhaar-enabled payments and bill payment transactions, effective February 29.

It has also asked the Noida-headquartered company to stop accepting deposits and credit transactions or any form of wallet top-ups after February 29.

To ensure customer convenience, RBI has allowed withdrawal and utilisation of funds by customers till the time balance is available in the Paytm account.

The banking regulator, in perhaps one of the harshest actions on a listed banking entity in recent times, has said this after finding major compliance issues in the company.

“The comprehensive system audit report and subsequent compliance validation report of the external auditors revealed persistent non-compliances and continued material supervisory concerns in the bank, warranting further supervisory action,” the RBI said in its notification.

On March 11, 2022 the RBI had asked Paytm to stop onboarding new customers.