The nation's central bank made a significant announcement to the fintech community on January 31. A circular from the RBI prohibited Paytm Payments Bank Limited (PPBL) from taking consumer deposits and credit transactions.
The bank released the instructions in response to Paytm's "continuing material supervisory concerns and persistent non-compliance." The RBI has set a deadline of March 15th for Paytm, after which the massive fintech company will have to adhere to specific regulations.
Let's examine the services that will continue to function following March 15:
Removal of Funds
Yes, you are still able to take money out of your wallet or existing fund and transfer it elsewhere. Additionally, you can use IMPS or UPI to withdraw money from your Paytm account.
Mandates for NACH
You can still take money out of your account or pay someone with it by using services like the National Automated Clearing House (NACH). You will not, however, be able to send or receive money into this account. Businesses can collect water bills, power bills, insurance premiums, and other payments with the aid of NACH.
Refunds and Cashbacks
Refunds and cash backs are still available from Paytm Payments Bank and its partner banks.
OTT Transfer
You should be aware that as long as there is money in your account, you can pay for your Netflix or Amazon Prime memberships if they are linked to Paytm. But to accomplish the same after March 15, one needs to switch to a different bank account.
Let's examine the services that will experience disruptions subsequent to March 15:
FASTag
There won't be any FASTag top-ups or functionality. Likewise, Paytm balances associated with FASTags are not transferable to another FASTag.
"FASTag is a device that employs Radio Frequency Identification (RFID) technology for making toll payments directly while the vehicle is in motion," according to the National Electronic Toll Collection.
Fund Transfers as well as Transfers
As of March 15, UPI and IMPS funds transfers into Paytm Payments Bank will no longer be possible. You won't receive salary transfers or direct benefit transfers from other Paytm Payments Bank users in terms of financial transfers.
For a while now, Paytm has been deeply troubled. The central bank issued four warnings to the Fintech for not adhering to fintech norms, according to a recent cover article in Outlook Business. It's unclear if the massive fintech company will rise again or face even greater destruction.
