Mumbai, Oct 7 (NVI) The Reserve Bank of India (RBI) has officially removed Paytm Payments Bank (PPBL) from the list of recognised scheduled banks following the cancellation of its banking licence.
This comes after the central bank cancelled PBBL’s banking licence in April this year for non-compliance. It stated that the affairs of the bank were conducted in a manner detrimental to the interest of its depositors, the report added.
Later, the Delhi High Court (HC) also ordered that PPBL be wound up.
“Paytm Payments Bank Limited has been excluded from the Second Schedule to the Reserve Bank of India Act, 1934…,” the central bank said in a statement on Wednesday.
The Second Schedule of the RBI Act is the official list of recognised banks that meet the central bank’s financial standards and get special operational privileges. ‘Scheduled bank’ means a bank included in the Second Schedule.
PPBL, an associate firm of Vijay Shekhar Sharma-promoted fintech firm Paytm, came under the regulatory scanner on multiple occasions earlier, including in March 2022, when the central bank barred it from onboarding new customers.
While cancelling the licence, the RBI said the bank’s affairs were conducted in a manner detrimental to its own interests as well as those of its depositors.
Earlier, PPBL was directed to stop onboarding new customers with effect from 11 March 2022 amid “material supervisory concerns” observed in the bank.
Thereafter, on 31 January 2024 and 16 February 2024, certain business restrictions were also imposed on the bank, including the prohibition of any further deposits / credits / top-ups to existing customer accounts, prepaid instruments, and wallets.
For customers, the RBI confirmed in April that your money is safe. It specified in its statement that ‘the bank has enough liquidity to repay its entire deposit liability upon winding up.’
Also, you can continue using the Paytm App for UPI, recharges, and payments, etc., as before.
Following the RBI action, One97 Communications, in its company filing, stated that it has no exposure to PPBL as it had already impaired its investment in the beleaguered entity as of March 31, 2024.
It added that key services, including the Paytm app, Paytm UPI, Paytm QR, Soundbox, card machines, and Payment Gateway, will continue to operate uninterrupted despite regulatory action by the Reserve Bank of India against its associate entity, Paytm Payments Bank Limited.
The company further clarified in its filing that its broader ecosystem, including Paytm Gold and Paytm Money, remains unaffected and will continue to operate normally. (NVI)
