The Reserve Bank of India (RBI) imposed restrictions on Paytm Payments Bank, barring the provision of its core services, including accounts and wallets, effective from March. This was announced on January 31. Although this action doesn’t constitute a license cancellation, it significantly limits the company’s operations.
The RBI permits customers to withdraw or use their balance amounts without constraints, up to the available balance.
Despite being a prominent figure in India’s fintech revolution, Paytm, with over 100 million KYC-verified customers according to its website, now faces operational constraints.
PayTM Wallet balance
Regarding Paytm wallet balances, post-February 29, Paytm can add and transfer money to the wallet, but not through Paytm Payments Bank. Users can add funds and utilize existing balances for bill payments.
PayTM FASTags
For users with Paytm FASTags, here’s a key update. The Paytm FASTag, linked to the Paytm wallet, will continue functioning as wallet transactions remain permissible after February 29 provided the account has enough funds. In its FAQs released recently, Paytm said that one can continue to use the existing balance on Paytm FASTag. In more simpler terms, no top-up is allowed after February 29 for now.
PayTM UPI
In terms of UPI transactions, Paytm users can conduct transactions through any bank account, not limited to Paytm Payments Bank. If your UPI address is linked to Paytm Payments Bank, transactions are restricted post-February 29. Users with UPI addresses linked to other banks can continue transactions beyond February.
However, the RBI’s directives do not encompass the Paytm Money app. As the services are regulated by SEBI, the impact of the RBI’s order on the sale and purchase of stocks and mutual funds via the Paytm Money app remains uncertain.