Paytm Payments Bank banned by RBI (Reserve Bank of India) from opening new accounts: RBI has announced a ban on Paytm Payments Bank from getting new customers to open account. The ban is said to have an immediate effect on the ground of “material supervisory concerns”. The official statement as per the RBI official website is as below:
Reserve Bank of India has today, in exercise of its powers, inter alia, under section 35A of the Banking Regulation Act, 1949, directed Paytm Payments Bank Ltd to stop, with immediate effect, onboarding of new customers. The bank has also been directed to appoint an IT audit firm to conduct a comprehensive System Audit of its IT system. Onboarding of new customers by Paytm Payments Bank Ltd will be subject to specific permission to be granted by RBI after reviewing report of the IT auditors.RBI Chief General Manager
Why is Paytm Payments Bank banned?
RBI said that Paytm Payments Bank does not have enough high infrastructure to maintain such huge amount of customer accounts. The bank is said to have been accepting new customer accounts, exceeding its capacity. This made the system fails and transaction fails quite frequent day by day. This is what is understood from the statement of RBI, but there could be some other reasons as well which is not disclosed.
What will happen to the existing customers of Paytm Payments Bank?
Though Paytm Payments Bank banned by RBI as of now from opening new accounts and new Paytm wallet, the existing accounts would remain operational as it was earlier. The money of existing users in their PPBL account, fixed deposits and Paytm Wallet / FASTag / Wallet Card and UPI services are completely functional and safe. Any new users can create Paytm UPI handles, and link them to their existing PPBL account or to other bank accounts.
So, the existing customers need not worry about this for now. Only problem over here is you cannot open a new bank account, wallet or UPI handle with the bank anymore as of now.
How long will the bank remain on PPBL?
RBI said Paytm Payments Bank to perform an external IT audit and post verification of the IT audit result, the ban may be lifted. But as of now, there is no information of when this audit will be planned and when its result would be declared. But Paytm assures on its website stating that they are taking actions to resolve the issue with RBI as below:
Dear customers, we value your relationship and continued trust in the Bank. We are taking necessary steps to comply with directions of RBI . We assure you that the recent RBI direction will not impact our existing customers in any way and they can continue to use our banking services seamlessly. Your balances with Paytm Payments Bank are fully secure.Paytm
Existing customers are now safe and need not worry. Also according to the policy, even if PPBL gets completely banned in future, your money is secured upto Rs 5 Lakhs. So, if your amount is with the limit, then you can relax. This ban is temporary for now. After the audit, if results are fine, everything would be normal again.
Moreover, this type of issue between Paytm Payments Bank and Reserve Bank of India is not new. Such issue has occurred in past as well and Paytm has overcome them. So, hopefully this time as well Paytm will bounce back. But may be, there will remain a bit trust issues within the customers going forward.
An IT guy who keeps interest in blogging. Started blogging since 2017. He is the owner of the blog wheretosave.in and knowledgebear.com. A family man who loves Travelling, Gadgets and FOOD.