The RBI said that the action against One 97 Communications, which runs Paytm, was due to "non-compliance and continued material supervisory concerns i

RBI ban on Paytm Payment Bank Limited : What will work for Paytm users 

 Ban on Paytm Payments Bank

The country’s central bank Reserve Bank of India has barred fintech major Paytm from offering all forms of banking services to its customers. The RBI said that the action against One 97 Communications, which runs Paytm, was due to "non-compliance and continued material supervisory concerns in the bank."

The new restriction applied by RBI may lead to several services offered by the platform becoming inoperable. Here are the services that will work and those that will not.

What will work after banned : 

FASTags

FASTags issued by Paytm Payment Banks will continue working and users can continue using existing balances in their FASTag wallet and via third-party banks after the nodal transfer happens.

Is UPI app will work for the Users ?

Paytm users can continue to use the Paytm app and Paytm UPI without any restriction.

Offline Merchants networks

Services like Paytm QR, Paytm Soundbox, and Paytm Card Machine for offline merchants will continue as usual, allowing onboarding of new offline merchants.

User deposits Safety

User deposits in savings accounts, Wallets, FASTags, and National Common Mobility Card (NCMC) accounts are not impacted. Customers can continue using existing balances.

What will not work after banned

Onboarding of new customers

Paytm Payments Bank Limited (PPBL) will not be able to onboard new customers or open new accounts.

Paytm app/wallet linked to Paytm Payments Banks

Paytmapp/wallet linked to Paytm Payments Banks will stop working after February 29. The beneficiary can continue to receive the credits up to February 29, 2024. Thereafter, the beneficiary can only withdraw or transfer funds from his wallet or account. No credits or top ups into Paytm Payments Bank account or wallet are allowed from March 1, 2024.

FQA

1. What services are banned for Paytm Payments Bank?

Accepting new customers

All deposits, including wallet top-ups

UPI/IMPS/Aadhaar payments

Bill payments

Fund transfers

2. Can I still use my existing Paytm wallet balance?

No, not directly. As of March 15, 2024, you could no longer use the balance for transactions.

However, you could withdraw the remaining balance to your linked bank account or another bank account through IMPS, UPI, or RTGS.

3. Can I still use the Paytm app for other services?

Yes, the Paytm app itself still functions for other services like:

Online shopping payments (if linked to another bank account)

Recharges, bill payments (using linked bank account or credit card)

Investments in stocks and mutual funds (unaffected)

4. What happened to my money in the Paytm Payments Bank account?

You could withdraw your remaining balance until March 15, 2024.

If you haven't already, the money is still held by Paytm Payments Bank in a secure escrow account. You can contact them to initiate a withdrawal.

5. What happens to my FASTags and NCMC accounts linked to Paytm Payments Bank?

You could use the balance on them until March 15, 2024.

You need to recharge them using another payment method going forward.

6. What are the alternatives for the banned services?

For banking services, open an account with another bank.

For payments, use your linked bank account, credit card, or other digital wallets like PhonePe, Google Pay, etc.

7. Will the restrictions be lifted?

It's unclear. The RBI hasn't provided any information on the timeframe or conditions for lifting the restrictions.

Paytm is working towards compliance with RBI regulations and exploring partnerships with other banks to offer similar services.