The Reserve Bank of India (RBI) on Friday relaxed the deadline by a fortnight till March 15 for the customers of Paytm Payments Bank Ltd (PPBL) to make deposit or credit transactions, while it released a bunch of frequently asked questions (FAQs).
The extension was accompanied by good news for its merchant partners who can look forward to a seamless settlement. Paytm has a merchant base of nearly four million.
One97 Communications (OCL), the Paytm parent, said it has joined hands with Axis Bank to settle merchant payments. Paytm shifted its nodal account to the private sector bank by opening an escrow account. The arrangement will replace the nodal account that OCL was using with PPBL.
This came after the RBI said in its FAQs that Paytm QR, Soundbox, and card machines will continue to operate without any disruption if it is linked to any bank account other than PPBL.
The FAQs also came on a day Indian Highways Management Company Ltd (IHMCL), the toll-collecting arm of state-owned NHAI, advised users to buy FASTags from 32 authorised banks minus PPBL for hassle-free travel.
On January 31, the RBI barred PPBL from accepting further deposits, credit transactions or top-ups in any customer accounts, prepaid instruments, wallets, FASTags and National Common Mobility Cards (NCMC), after February 29. This did
not extend to interest, cashback, or refunds which could be credited anytime.
The banking regulator said on Friday it is extending the deadline till March 15 keeping in view the interest of customers (including merchants) of PPBL who may require a little more time to make alternative arrangements and the larger public interest.
According to its revised directions, no further deposits, credit transactions or top-ups will be allowed in any customer accounts, prepaid instruments, wallets, FASTags, or NCMC cards after March 15, 2024, other than any interest and cashback. (See chart)
The central bank has permitted sweep-in of money from accounts in partner banks as well as refunds, which may be credited anytime. The FAQ said no transfer of money into a PPBL account after March 15 will be permitted through UPI or IMPS transfers.
Money from PPBL accounts can be withdrawn after March 15 through UPI or IMPS up to the balance available in accounts.
PPBL has also been directed to facilitate withdrawal of customer deposits that are parked with partner banks under the automatic ‘sweep-in sweep-out’ facility.
The ceiling of Rs 2 lakh per customer at the end of the day on the balance prescribed for a payments bank will apply.
Merchants can accept payments using a Paytm QR code, soundbox or POS terminal if they have a relationship with another bank to which funds can be transferred.
With Paytm, the existing arrangement can continue after March 15. But no credits will be allowed after that except refunds, cashback, sweep-ins and interest.
