<h5>What action has been taken by RBI?</h5><p>The Reserve Bank of India (RBI) has placed certain restrictions on Paytm Payments Bank. It will not be able to accept deposits or add money to customer accounts, wallets, FASTags, etc., after 29th February 2024.</p><p>Interest, cashback, and refunds can be added to these accounts, which customers can use for withdrawals or spending. Banking services will not be available after 29th February.</p><p>These are some actions taken by RBI on Paytm Payments Bank. Due to these actions, Paytm Payments Bank's operations could stop soon.</p><h5>How will this affect the customers?</h5><p>As the payment bank owns the wallet and FASTag, customers won’t be able to add money to those accounts after 29th February 2024. The RBI has allowed such customers to extinguish their balances, as they cannot add money after the mentioned date.</p><p>People using the Paytm app will be unaffected because it is owned by the payments bank's parent company (One 97 Communications). Also, the app would support UPI transactions not linked to Paytm Payments Bank.</p><p>Customers will also be able to transfer money out of their wallets and bank accounts, but they will be unable to receive money starting 1st March 2024. Only the functions of the Paytm Payments Bank will be stopped. Paytm will continue working with other banks.</p><h5>What’s the reason for RBI’s action against Paytm Payments Bank?</h5><p>The RBI ordered the closure of Paytm Payments Bank due to noncompliance and supervisory issues. However, a new report claims that many accounts at Paytm Payments Bank were opened without sufficient identity verification. The RBI thinks these accounts may have been used for money laundering.</p><p>The RBI has passed this information to the government, and it will be investigated.</p><h5>What are Paytm Payments Bank’s responses to the allegations?</h5><figure class="image"><img src="https://firebasestorage.googleapis.com/v0/b/newsahoot.appspot.com/o/rbi-takes-action-against-paytm-payments-bank%2FPaytm%202.jpg?alt=media&amp;token=829bb14f-d51e-4777-871a-22451b8e16c9"><figcaption>Vijay Shekhar Sharma, Paytm’s CEO. &nbsp;Photo by Moneycontrol.</figcaption></figure><p>Paytm has rejected allegations of money laundering. A Paytm spokesperson has said the company has never been involved in such wrongdoings. Vijay Shekhar Sharma, Paytm’s CEO, has assured customers that the Paytm app will continue working after 29th February 2024.</p><h5>So, what are UPI and wallets?</h5><p>UPI is a mobile payment technique that allows a person to transfer payments between bank accounts immediately. The National Payments Corporation of India (NPCI) launched UPI in 2016. When transferring money via UPI, each user is required to have a unique ID, known as the UPI ID.</p><p>The UPI ID is like a unique identity for a bank account that allows a person to transfer and receive funds from one bank to another. Using a UPI mobile app, we can scan a QR code to send money. It also allows us to transfer money from our bank account linked to our mobile number.</p><p>A digital wallet is like a virtual container where you keep your money online. It's comparable to a real wallet in that you can keep cash, cards, etc., but everything is digital and managed through an app or online platform. One can use the funds in the digital wallet to make payments, transfer money to others, etc.</p>

RBI has placed various restrictions on Paytm Payments Bank, stopping deposits and fund additions from 29th February 2024.

RBI Takes Action Against Paytm Payments Bank

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RBI Takes Action Against Paytm Payments Bank

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